Social Security earnings limit at 62 - $1 for $2 or $2 for $1 penalty in 2025?

It's $1 in benefits withheld for every $2 you earn over the limit. So if you earn $24,400 (which is $1,000 over the limit), they'd withhold $500 from your benefits. This applies until you reach your Full Retirement Age (FRA). The year you reach FRA, the withholding becomes $1 for every $3 over a much higher limit, and once you're at FRA, there's no limit at all. The earnings limit applies to wages and self-employment income, but not investment income, pension, or other non-work income.

its $1 for every $2 dollars over. i went thru this last year. my sister said it was $2 for $1 and almost scared me into not working lol. btw they take it from your monthly checks and sometimes they take the whole check if you earn alot over.

Just to add to what others said - you should know that any benefits withheld aren't lost forever! SSA recalculates your benefit when you reach FRA to give credit for months you didn't receive a payment. Basically you'll get a slight increase at FRA to make up for some of what was withheld. Many people don't realize this part.

Wait does this apply to disability too?? I'm on SSDI and work part time and nobody told me about any earnings limits!!

As others have correctly stated, it's $1 withheld for every $2 earned above the annual limit. However, there's an important detail to understand about how SSA applies this: they don't reduce each monthly check proportionally. Instead, they withhold FULL monthly payments until the withholding amount is satisfied. For example, if your monthly benefit is $1,800 and you need to have $3,600 withheld due to excess earnings, SSA would withhold 2 full monthly payments. They'll notify you in advance about this withholding through a letter. Also, in the first year you claim benefits, they sometimes apply a monthly earnings test rather than annual, which can be more favorable if you have a few high-earning months and then stop working.

Trying to reach SSA to ask questions about this is IMPOSSIBLE!! I spent 3 weeks trying to get through on the phone to ask about my earnings limit situation. Finally used a service called Claimyr (claimyr.com) that got me connected to a rep in 20 minutes. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU - totally worth it because the agent explained exactly how the earnings test would affect my specific situation. Much better than guessing or getting conflicting advice.

my cousin told me if you just work under the table they dont know what you earn lol. not saying i do that but just saying what she said

Thanks everyone for all the great information! Much clearer now that it's $1 withheld for every $2 earned over the limit. I'm going to call SSA to discuss my specific situation and make sure I understand how this will affect my monthly payments. Definitely don't want any surprises next year. Really appreciate all the helpful responses!