Social Security earnings limit before FRA - turning 65 soon but worried about excess earnings
I'm turning 65 in July and planning to start my Social Security retirement benefits at the beginning of August. I've been working full-time but want to make sure I don't lose any benefits due to the earnings test. How much can I earn from January through July before I hit the annual limit? My company is offering a bonus in June and I'm not sure if I should take it or ask them to delay it until after I start collecting. I've heard different numbers thrown around and I'm completely confused about how the earnings test works in the year you start benefits. Can someone explain this in simple terms?
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Katherine Ziminski
The annual earnings limit for 2025 if you're under Full Retirement Age is $24,960. But since you're starting benefits in August, you only need to worry about earnings from August-December. The monthly limit is $2,080. Any earnings before you start collecting don't count against you! Take that bonus in June!
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Kaiya Rivera
•Wait, really? I thought they looked at my W-2 for the entire year. So you're saying I could earn $100k from January-July, then start benefits in August and only have to worry about the monthly limit for the rest of the year? That seems too good to be true.
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Noah Irving
The previous commenter is partially correct but missing some details. For the year you first claim Social Security retirement benefits, SSA applies a monthly earnings test rather than the annual test, but ONLY for that first calendar year. For 2025, you can earn up to $2,080 per month without penalty in the months AFTER you begin receiving benefits. Your earnings in the months BEFORE you claim have no impact on your benefits. So if you start benefits in August, only your earnings from August-December are subject to the test. Your June bonus would not affect your benefits at all since it's before you start collecting. The earnings test only applies to earned income (wages, self-employment), not investments, pensions, etc.
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Kaiya Rivera
•Thank you so much for the detailed explanation! So just to make sure I understand: I could theoretically earn $200k from January-July, then start benefits in August, and as long as I earn less than $2,080 per month from August-December, I wouldn't lose any benefits? Are there any traps I should watch out for?
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Vanessa Chang
ur making this way more complicated than it needs 2 be. first year = monthly test, earnings b4 u start collecting dont matter. take the bonus! i went thru this last yr and was fine
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Kaiya Rivera
•Thanks for sharing your experience! It's reassuring to hear from someone who's been through this recently.
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Madison King
This is one of those weird SS things that actually WORKS IN YOUR FAVOR!! Take that bonus in June!! The SSA doesn't care what you make BEFORE you start collecting, only AFTER. I stressed about this for months until I talked to an agent who confirmed it. But good luck getting through to SSA to verify...I spent DAYS trying to speak to someone!!
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Julian Paolo
•You can skip the phone waiting game with Claimyr. I was skeptical but it got me through to an SSA agent in about 20 minutes instead of hours on hold. They have a video demo at https://youtu.be/Z-BRbJw3puU that shows how it works. Made getting my earnings test questions answered so much easier.
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Ella Knight
The advice given is correct regarding the monthly earnings test. However, there's another important factor to consider. At 65, you're still 2 years away from Full Retirement Age (FRA) if you were born in 1960 or later. The reduction in benefits for claiming early is permanent. Have you calculated how much your benefit will be reduced by claiming at 65 versus waiting until your FRA or even age 70? The earnings test is just one piece of the puzzle.
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Kaiya Rivera
•That's a good point. I've actually run the numbers and for my specific situation (health concerns in the family), claiming at 65 makes more sense than waiting. I'm trying to maximize lifetime benefits based on my circumstances.
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William Schwarz
BE CAREFUL!!!! My brother-in-law got hit with a HUGE overpayment bill because he misunderstood how this works! Make sure you report your earnings to SSA right away when you start benefits. They don't find out about your earnings until tax time the NEXT YEAR and by then you could owe thousands back if you went over the limit!!
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Noah Irving
•This is a valid concern. To avoid potential overpayments, you should proactively report to SSA if you expect to exceed the monthly earnings limit in any month. You can do this through your my Social Security account online, by calling, or visiting an office. It's always better to report changes in advance than to deal with an overpayment later.
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Katherine Ziminski
Just to add - when you do hit the earnings limit, they don't take away your entire benefit. They withhold $1 in benefits for every $2 you earn above the limit. So if you go over by $1,000 in a month, they'd withhold $500 in benefits.
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Kaiya Rivera
•That's less harsh than I thought! So I could potentially work a bit more and just accept a reduced benefit. That gives me more flexibility.
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