Social Security early retirement and self-employment hours - how will the 2025 earnings limit affect me?

Thank you for explaining that! So just to be clear - if I work 50 hours a week for 2 weeks in January (100 hours total that month), but only earn $1,000, would they still withhold my January benefit even though I'm way under the monthly earnings portion of the annual limit?

Oh no! That's exactly what I'm worried about. Did your brother have to pay back benefits he'd already received? Or did they just withhold future payments?

they sent him a notice saying he got overpaid and gave him options to either pay back or have future checks reduced!!! he was FURIOUS!!!! now he just doesn't work any months he wants to get ss $$

Does this mean they could do 6 months intense work (and no SS benefits) and 6 months no work (getting full SS) and potentially earn more than $23,500 total for the year? That seems like a loophole.

It's not actually a loophole - it's specifically how the rule is designed! SSA calls it the "grace year" rule. In the first year you retire, you can receive a full benefit for any month you're "retired" under their rules, regardless of your annual earnings. So yes, they could work January-June intensively (earning well over $23,500), have benefits withheld those months, then collect full benefits July-December if they don't perform substantial services in those months. The monthly earnings test only applies in the first year of retirement though. After that, only the annual test applies.

Thanks, I might need to use that service. I've tried calling SSA twice already and gave up after being on hold for over an hour both times. Did you find them helpful in explaining the self-employment rules?

Yes, very helpful! The SSA rep I spoke with explained that they typically look at both your tax returns and any documentation you keep of your work hours. She recommended keeping a calendar or timesheet even if I don't normally track hours, just for SSA purposes. Better to have too much documentation than too little.

I feel your frustration! But to be fair, the rules are in place because self-employed people can manipulate their income timing more easily than employees. Still annoying though.

They could at least have some BASIC INFORMATION about this on their website!! I've been on ssa.gov and there's hardly anything explaining this 45 hour rule in detail. They'll gladly take your application for early benefits though!!!

That's really helpful to hear a real example! When you say they withheld benefits for the 4 months, did they tell you in advance they were doing that, or did they just not send payments?

They didn't know in advance - I reported my expected work pattern when I applied. They provisionally paid me for all months, then at tax time when they verified my earnings, they determined I wasn't entitled to those 4 months and set up a repayment plan. Next year will be simpler since they already know my work pattern.

If you're working less than 15 hours per month in self-employment, you should be fine under the monthly test. However, you still need to stay under the annual earnings limit ($23,500 in 2025) or you could face benefit reductions. And yes, self-employment is treated differently than regular W-2 employment because you have more control over when you recognize income and how many hours you work.

They typically don't ask for hour logs unless something triggers a review. The most common trigger is if your tax return shows significant self-employment income but you received full benefits. They might also review if someone reports you (rare but happens), or if you have inconsistencies in your reporting. Better safe than sorry - keep those logs!

Smart approach! One more tip: in that first year, you can notify SSA which months you expect to have substantial earnings or services. They can proactively withhold benefits for just those months instead of discovering it later and creating an overpayment situation. Good luck with your semi-retirement!

Great questions! From what I understand, you can report your expected work pattern when you initially apply for benefits - there's a section where they ask about your work plans. You can also update them later if your situation changes, but it's easier to get it right upfront. As for the "highly skilled occupation" determination, SSA generally considers work that requires specialized knowledge, training, or experience as highly skilled. Financial analysis would very likely qualify since it requires expertise and professional judgment. The rule basically means if you're doing skilled work for even 15+ hours a month, they might consider it substantial services. The flexibility piece is tricky though - if you end up working more months than predicted, you could face overpayments. If you work fewer months, that's usually not a problem. I'd recommend being conservative in your initial estimates and maybe planning for one extra "work month" as a buffer.

@Shelby Bauman covered most of this well! Just to add - when I applied for benefits, I used Form SSA-777 to report my expected self-employment. You can also call them to update if things change, though as others mentioned, getting through can be challenging. For financial analysis consulting, that would definitely qualify as highly skilled work. SSA has a list of occupations they consider skilled, but generally anything requiring professional licensing, advanced education, or specialized expertise falls into this category. One thing to watch out for - even if you work less than 15 hours in a month, if you re'making significant income that month, you could still hit the monthly earnings portion of the test. For 2025, that would be roughly $1,958 per month $23,500 (÷ 12 .)So you really need to track both hours AND monthly earnings, not just one or the other.

Great questions @Darcy Moore! From my experience dealing with SSA, they look at total monthly hours regardless of how they're distributed within the month. So yes, 105 hours in a month would definitely count as substantial services even if it was all front-loaded into the first two weeks. The weekly distribution doesn't matter to them - it's purely a monthly total. For the payment timing issue, SSA generally uses when you actually receive payment, not when you perform the work. So work done in February but paid in March would count toward March's earnings for the monthly test. This can actually work in your favor if you can control payment timing - you might be able to bunch payments into months you're already planning to forfeit benefits anyway. I learned this the hard way when I had a client pay me late one month and it pushed me over the monthly earnings limit unexpectedly! Now I try to coordinate with clients on payment timing when possible, especially in that first year of early retirement when the monthly tests apply. Definitely keep detailed records of both when work is performed AND when payments are received - SSA may want to see both if they do a review.

@Harper Thompson You re'asking really smart strategic questions! As someone new to this whole system, I m'learning so much from this thread. The invoice timing idea is brilliant - if payment timing is what matters for the earnings test, then batching all your invoices into designated work "months could" definitely help you stay cleanly separated. I hadn t'thought about the estimated tax angle, but that makes sense too. Since you re'already required to track income quarterly for tax purposes, that documentation would probably be helpful if SSA ever questions your monthly earnings reports. One thing I m'wondering though - for web development work, how do you handle ongoing maintenance contracts or retainer relationships with clients? Those seem like they might be harder to batch into specific months compared to one-off projects. Do you just avoid those types of arrangements during your early retirement years? This whole discussion is making me realize I need to completely rethink how I structure my consulting business before I retire. The SSA rules are way more complex than I expected!

@Harper Thompson Your strategic approach sounds really smart! I m'also new to navigating these rules, but from everything I ve'read in this thread, the batch "your income strategy" seems to be the way to go. Regarding your estimated tax payments question - that s'actually a great point I hadn t'considered. Since you re'already documenting quarterly income for tax purposes, those records would definitely support your monthly earnings reports to SSA. Plus, if you re'timing your client payments to bunch into specific months, your estimated tax payments would naturally align with that pattern too. For web development, you might want to consider restructuring retainer clients into project-based billing during your early retirement period. Instead of monthly retainers, maybe you could batch their work into quarterly or semi-annual projects that you complete during your designated work "months. It" s'more admin work upfront, but could save you from accidentally triggering the earnings test. I m'realizing I need to have these conversations with my own clients well before I retire. Setting expectations early about potentially changing billing schedules seems crucial for making this work smoothly. Thanks for bringing up the estimated tax angle - that s'the kind of practical detail that makes all the difference!

@Mateo Hernandez Welcome to the community! You re'smart to be asking these questions now rather than finding out the hard way later. From what I ve'gathered in this thread, it s'better to report changes sooner rather than later to avoid overpayment situations. For reporting substantial services, I believe you can call SSA or submit updates in writing, but given how hard it is to get through on the phone as (several people mentioned ,)written documentation might be more reliable. You want a paper trail anyway. Regarding the time logs, I m'curious about this too as someone just starting to track my hours. From the experiences shared here, it sounds like daily totals are probably sufficient, but I m'keeping brief notes about what type of work I did each day just in case. Better to have too much documentation than too little, right? Your tax season strategy makes total sense - concentrate all that work into January-April, forfeit benefits those months, then collect the other 8 months. That seems to be the approach several successful people here have used. Just make sure to notify SSA about your expected work pattern when you report! Good luck navigating this system - at least we re'all learning together!

@Bethany Groves Great questions about creative work! I m'also new here but have been following this thread closely. For tracking creative hours, I think you re'right that SSA would want actual work time rather than passive thinking time. Most people seem to track when they re'actively working on client projects - so your 3 hours of active designing would count, but not the background mental processing. Regarding client relationships, that s'definitely a concern I share. Maybe you could frame it as seasonal availability rather than explaining all the SSA rules? Like I "m'restructuring my practice to focus intensively on projects during certain months of the year. Some" clients might actually prefer that approach if it means they get your full attention during those periods. From reading the experiences here, it sounds like the documentation hassle and potential overpayment risks of trying to work year-round while collecting early benefits just aren t'worth it. The batch "work into specific months strategy" seems much cleaner, even if it requires some client education upfront. I m'curious to hear from others who ve'managed creative businesses - do you bill by project completion or track hourly? That might affect how you structure this approach too.