Social Security earnings limit calculation: monthly vs. yearly for 2025

Social Security applies both monthly and yearly earnings tests when you're under FRA. For 2025, the annual limit is $22,320, and they'll deduct $1 in benefits for every $2 you earn above that limit. However, there's also a monthly grace year rule that applies during the first year you claim benefits. In this case, for 2025, you can earn up to $1,860 in any month and still receive full benefits for that month regardless of your annual total. This helps people who might have substantial earnings before retirement but then start benefits mid-year. So to answer your question - they look at both! They'll check if your annual earnings exceed $22,320, but in your first year of benefits, they'll also check each month individually.

they def look at the whole yr i went over by like $900 back in 2023 and they made me pay back some of my benefits the next feb. it was a mess dealing with them!!

The earnings test is a bit more nuanced than some of the other comments suggest. Let me clarify a few points: 1. In the first year you claim benefits (2025 for you), SSA applies a monthly earnings test. This isn't just a "grace year" - it's specifically designed for people transitioning to retirement. For 2025, you can earn up to $1,860 in any month and still receive benefits for that month, regardless of your annual total. 2. After that first year, only the annual test applies (unless you reach FRA). 3. When calculating earnings, SSA only counts wages earned from employment or net earnings from self-employment. They don't count investment income, government benefits, interest, pensions, annuities, or capital gains. 4. If you do exceed the limits, SSA withholds benefits at the rate of $1 for every $2 earned above the annual limit. For your specific situation with irregular hours, if you're under FRA for all of 2025 but this is your first year receiving benefits, you could potentially earn more than $22,320 for the year but still receive benefits for months where you earned $1,860 or less.

This monthly/yearly thing confused me so much when I retired!!! I wish the SSA would explain this better on their website or send out clearer notices. I ended up having my benefits reduced because I didn't understand how it all worked, and then spent MONTHS trying to get someone on the phone to explain it to me.

Everyone here is overthinking this. Just keep your annual income under the limit and you'll be fine. SSA has bigger issues to deal with than monitoring your month-to-month earnings.

my aunt said they took like 4 months of her benefits away last year cuz she forgot about the limit and kept working too much!! be carful!!

I've been dealing with this exact situation for the past 8 months and it's been DRIVING ME CRAZY!!! The earnings limit is the most confusing thing EVER and the SSA representatives give different answers every time I call!!! I'm so frustrated I can't even tell you. I just wanted to work part-time after starting my benefits but now I'm constantly worried about going over the limit. I've been keeping a spreadsheet of every penny I earn and I still don't know if I'm doing it right!!! Does anyone know if they count your gross wages or after-tax? And do employer contributions to health insurance count toward the limit??? NOBODY AT SSA WILL GIVE ME A STRAIGHT ANSWER!!!!

Thanks everyone for the responses! This is clearer now. So for 2025 (my first year on benefits), I'll keep track of both my monthly earnings to stay under $1,860 for months I want full benefits, but also watch my annual total. And I'll definitely keep good records for when I file taxes next year so there are no surprises.

One thing that might help with your planning - since you mentioned irregular hours and potentially picking up extra shifts in summer - is to know that Social Security counts earnings based on when you actually perform the work, not when you get paid. So if you work extra shifts in July but don't get paid until August, those earnings count toward July for the monthly test. This can be important if you're trying to stay under the $1,860 monthly limit for specific months. Also, if you do go over the annual limit, any benefits withheld get "credited back" to you once you reach full retirement age, so it's not permanently lost money - just delayed. Keep those good records you mentioned!

Just wanted to add something that might help with your summer planning - if you're thinking about picking up extra shifts, you might want to strategically time them around the monthly limits. Since you're in your first year of benefits, you could potentially have some months where you earn more than $1,860 (and don't get benefits for those months) but still stay under the annual $22,320 limit overall. This way you could maximize your total income for the year while still receiving benefits for the months you keep earnings low. It's like having flexibility to "bank" your earnings in certain months. Just make sure to track everything carefully since the calculations can get tricky with irregular schedules!

Just a heads up for everyone discussing strategy around the monthly limits - while it's true you can plan around the $1,860 monthly threshold in your first benefit year, make sure you understand that SSA will still apply the annual earnings test at the end of the year. If your total earnings exceed $22,320, they'll calculate an overpayment even if you strategically skipped benefits for high-earning months. The monthly test in the first year is more of a "grace period" that prevents withholding during that specific month, but it doesn't override the annual calculation. So while Lucy's strategy can help with cash flow throughout the year, you'll still need to keep your total annual earnings in mind to avoid having to repay benefits later. The good news is that detailed record-keeping (like what AstroAdventurer mentioned) will help you stay on top of both limits!

As someone who just started navigating this system myself, I really appreciate all the detailed explanations here! The distinction between the monthly test in your first benefit year versus the annual test is something I definitely didn't understand before reading through these comments. One question I have - for those of you who have been through the process of SSA calculating an overpayment, do they send you clear documentation showing exactly how they calculated what you owe? I'm worried about keeping good records but then having their calculations not match mine. Also, is there an appeals process if you disagree with their determination? I tend to be pretty meticulous with my record-keeping, but I want to make sure I know what to expect if there are discrepancies down the road. Thanks again to everyone sharing their experiences - this is exactly the kind of real-world insight that's hard to find on the official SSA website!

This thread has been incredibly helpful - thank you all for sharing your experiences! I'm in a similar situation and was completely overwhelmed by the earnings limit rules until reading through these explanations. One thing I wanted to add that might help others: I called my local Social Security office (not the national number) and was able to get an appointment to go over my specific situation in person. The representative there was much more helpful than trying to get answers over the phone, and she walked me through exactly how the calculations would work based on my expected earnings pattern. She also gave me a worksheet to track my monthly earnings throughout the year. For anyone feeling as confused as I was initially, it might be worth trying to schedule an in-person appointment if you have a local office nearby. Having someone look at your actual situation rather than trying to understand the general rules made a huge difference for me. Plus, you get everything in writing which helps when you're trying to keep those detailed records everyone's talking about!