Social Security earnings limit at 62 - Do royalties count & what about SSDI limits?

Thank you so much for this clear explanation! So the $22,320 yearly limit only applies to the hardware store job, not my dad's royalties? That's a huge relief. What happens exactly if I accidentally go over the limit though? Will they just stop my payments completely or reduce them proportionally?

This isn't completely accurate. The higher limit only applies in the year you reach FRA, and only for the months before your birthday. After FRA, there's no limit at all. Also, FRA varies by birth year - it's not 67 for everyone!

That's likely because your sister was actively writing books - so the royalties were considered earned income from self-employment. The situation is different for inherited royalties from a deceased parent's work. Those are considered unearned income and don't count toward the earnings test.

While I understand your frustration, the earnings limit is actually mentioned in the paperwork when you apply for benefits before FRA. It's important to report changes in your work situation throughout the year so SSA can adjust your benefits gradually rather than creating an overpayment situation. And regarding the royalties - the distinction between earned and unearned income is pretty well established in SSA policy. Inherited royalties are consistently treated as unearned income, similar to investment dividends or interest.

Thanks for the tip! I'll check out that service. I've tried calling SSA three times now and always get disconnected after being on hold for hours. It's so frustrating trying to get answers.

The earnings limit typically increases each year with the COLA (Cost of Living Adjustment), but SSA hasn't announced the 2026 limits yet. The 2025 limit is $22,320 for those under FRA for the entire year. A nearly 12% increase to $25,000 would be unusual, as COLA increases have been running 2-4% in recent years.

Great question! For the retirement earnings test (RET), SSA looks at your annual total, not month-by-month earnings. So your seasonal business model works fine with Social Security as long as your total earnings for the year stay under the limit. This is different from SSDI, which does use a monthly SGA amount to determine eligibility.

They NEVER told me about getting the money back later!!! I've been at FRA for 2 years now and my benefit is still the same reduced amount. How do you get them to do this recalculation???

@Sofia Martinez - The recalculation should happen automatically, but sometimes SSA misses it or there are delays in their system. You ll'want to contact them directly to request a manual review of your earnings record. They ll'need to verify which months had benefits withheld due to the earnings test and then adjust your monthly benefit amount accordingly. You can also check your my Social Security account online to see if there s'any record of the adjustment. If you re'still having trouble getting through by phone, you might want to try visiting your local SSA office in person or use that Claimyr service @Ava Thompson mentioned earlier.

This is incredibly helpful, thank you! I had no idea about the unused vacation pay rule - that could have really caught me off guard since I do have some accrued vacation time from my old job that they're supposed to pay out in a few months. The first year rule sounds like it might be exactly what I need to understand better. Since I started benefits in January 2025, does that mean for the rest of 2025 I can use the monthly $1,860 test instead of worrying about the annual $22,320 limit? That would make the summer hardware store job much more manageable to plan around. I'm definitely going to start keeping better records of everything. Do you know if there's a specific form or way SSA prefers you to track and report earnings throughout the year, or is it just important to have the documentation ready if they ask?

Great questions! For the first year rule, yes - since you started benefits in January 2025, you can use the monthly earnings test ($1,860/month) for each month from January forward instead of the annual limit. This can be really advantageous if you have variable income throughout the year. For record keeping, SSA doesn't require a specific form for tracking during the year, but they do want you to report significant changes in your work situation promptly. I'd recommend keeping simple monthly records showing your gross wages/self-employment income from each source. When tax time comes, your W-2s and 1099s will be the official documentation they reference. One more tip - if you do end up working that hardware store job, make sure to tell SSA about it when you start. They prefer to adjust your monthly benefits gradually rather than having to recover overpayments later. You can report work changes through your my Social Security account online or by calling (though as you've experienced, the phone wait times are rough!). The monthly test really does make seasonal or part-time work much more manageable when you're just starting benefits. Sounds like you're being smart about planning this out carefully!

@Fiona Gallagher - Yes, exactly! Since you started benefits in January 2025, you can use the monthly earnings test $1,860 (for) each month from January forward, rather than being stuck with just the annual test. This gives you much more flexibility for that summer job. For tracking earnings, SSA doesn t'require a specific form during the year, but they do want you to report significant changes promptly. I d'recommend keeping a simple spreadsheet with dates, income sources, and amounts. When you file your annual earnings report usually (due by April 15th the following year ,)having everything organized makes it much easier. The key forms you ll'eventually need are: - Form SSA-777 Annual (Report of Earnings if) they send you one - Your W-2s and 1099s for the tax year - Records of any self-employment income One more tip: if you do go over the monthly limit in any given month, SSA will withhold benefits for that specific month rather than doing the annual calculation. So the monthly test can actually be more forgiving for irregular income patterns like seasonal work. Since you mentioned the royalty payments come quarterly, just make sure to note those dates and amounts even though they shouldn t'count against your limit. Better to have too much documentation than too little if questions come up later!

Great questions! Let me clarify the first year rule for you - yes, since you started benefits in January 2025, you can use the monthly earnings test ($1,860/month) for each month from January onward, BUT only if it's more favorable than the annual test. You don't have to choose one or the other - SSA will automatically apply whichever test results in higher benefits for you. For tracking earnings, there's no specific SSA form you need to use throughout the year, but I'd recommend keeping: - Pay stubs from any employment - 1099s for self-employment income - Bank statements showing when payments were received - A simple spreadsheet with dates and amounts The key is being able to prove WHEN you received the income, since timing matters for the monthly vs annual test calculation. Also, make sure to report any significant changes in your work situation to SSA promptly - they'd rather adjust your benefits gradually than deal with overpayments later. You can report changes online through your my Social Security account or by calling (though we all know how that phone situation goes!). The vacation payout timing can definitely be tricky - just make sure you know exactly when that payment will hit your account so you can factor it into your earnings tracking.

Yes, exactly! Since you started benefits in January 2025, you can use the monthly earnings test for the remainder of 2025. This means for each month after January, you can earn up to $1,860 without any benefit reduction, regardless of your total annual earnings. For tracking and reporting - SSA doesn't require a specific form for ongoing tracking, but they do want you to report significant changes when they happen. You should call them (or visit your local office) if you expect to earn significantly more or less than what you initially reported when you applied. For your own records, I'd suggest keeping: - Pay stubs from the hardware store job - Any 1099s for the royalty payments (even though they don't count toward the limit) - Records of when you started/stopped working - Any severance or vacation payout documentation The key is being proactive about reporting changes rather than waiting until your annual wage report. This helps avoid those nasty overpayment situations that @Sofia Martinez experienced. One more tip: if you do go over the monthly limit in any given month, they ll'withhold benefits for that specific month, but it won t'affect your benefits in months where you stayed under the limit. It s'much more forgiving than the annual test in that way!