Social Security earnings limit changes in FRA year - confused about monthly vs. annual limits
I just turned 66 this April which is my full retirement age according to SSA. I started collecting Social Security last year at 65, and I've been careful about the earnings limit ($22,320 for 2025). My question is about what happens exactly in the year I reach FRA. I know there's a higher limit in the year you reach full retirement age, but does that higher limit apply to the entire calendar year or just the months before my birthday? Also, do they still count my earnings monthly or annually once I hit my FRA month? My HR department is telling me different things than what I think I read on the SSA website, and I'm worried about accidentally going over and getting hit with deductions. Thanks for any help!
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Morgan Washington
The higher earnings limit ONLY applies to the months in the calendar year BEFORE you reach your Full Retirement Age. For 2025, that higher limit is $59,520, but it only counts earnings in January through March (the months before you reached FRA in April). After you reach your FRA month, there is NO earnings limit at all - you can earn as much as you want with no reduction in benefits.
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Layla Sanders
•Thank you! So just to be sure I understand - for Jan-Mar, I could have earned up to $59,520 total (not per month). And now that I've passed my FRA month in April, I can earn unlimited for the rest of the year? That's a huge relief.
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Kaylee Cook
my husband had same problem last year. hr people kept telling him wrong info! they said he would lose benifits all year if he made too much. SSA told him once he hit his birth month (FRA) he could make unlimited $$ with NO penalty. so frustrating when companies dont know the rules!!
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Layla Sanders
•That's exactly what's happening to me! HR said I'd be penalized for the whole year if I earned too much, but sounds like that's wrong. Did your husband have to do anything special to make sure SSA knew he had reached FRA?
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Kaylee Cook
•nope! system automatically knew his birthdate. they just stopped counting earnings after his FRA month. everything worked fine with no extra steps
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Oliver Alexander
The earnings test is quite specific about FRA. There are actually THREE different rules depending on where you are in the process: 1. Years BEFORE the year you reach FRA: $22,320 annual limit (2025) 2. Months IN the year you reach FRA but BEFORE your FRA month: $59,520 limit just for those months 3. Month you reach FRA and beyond: NO LIMIT WHATSOEVER For the second category, they only count earnings in the months before your FRA month, and they only withhold $1 for every $3 you earn over the limit (unlike the $1 for $2 reduction in category 1). Your HR department might be confusing the rules or not understanding the monthly distinction in your FRA year.
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Lara Woods
•But they count it based on when you EARN the money, not when you get paid, right? I'm in a similar situation and my employer paid me a bonus in my FRA month for work I did earlier in the year. Does that count toward the limit or not?
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Oliver Alexander
•Great question. For wages, they count it when you EARN it, not when it's paid. For self-employment income, they count it when you RECEIVE it. So your bonus should count toward the months you actually performed the work, not when you received the payment. This can get complicated with things like bonuses and vacation pay, so you might want to clarify your specific situation with SSA directly.
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Adrian Hughes
I went thru this last yr! HR depts never get this right cause they dont deal w/ SS rules everyday. Once u hit FRA month youre DONE with earnings test FOREVER. no more limits no more worries!! im making twice what I did last year now and keeping ALL my ss benefits. its greeeeat!
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Molly Chambers
One thing nobody has mentioned is that even if you do exceed the earnings limit before reaching FRA, Social Security will recalculate your benefit later. They'll adjust your payments to credit you for the months you didn't receive benefits due to working. So while you might see reduced benefits initially if you exceed the limit, you'll eventually get some of that back through higher payments later.
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Layla Sanders
•I had no idea about that recalculation! Is that automatic or do I need to request it? And does it happen right after I reach FRA or years later?
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Molly Chambers
•It's automatic! After you reach FRA, SSA will recalculate your benefit amount to account for months when benefits were withheld. You don't need to request it. It typically happens shortly after you reach FRA, but can sometimes take a few months for the adjustment to appear in your payment amount.
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Ian Armstrong
I had EXACTLY this issue last year and spent HOURS trying to get through to Social Security to confirm the rules. Called for weeks and kept getting disconnected or waiting forever. SO FRUSTRATING!!!! Finally used Claimyr (claimyr.com) to get through to a real person at SSA who confirmed everything people are saying here - no earnings limit AT ALL once you reach your FRA month. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU - saved me hours of trying to get through and the agent I talked to was really helpful explaining all the earnings test rules. Definitely recommend if you need to confirm your specific situation.
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Layla Sanders
•Thank you for the recommendation! I've been trying to get through to SSA for weeks with no luck. I'll check out that service. I really need to confirm this directly with someone who can look at my specific record.
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Oliver Alexander
Just to add a bit more clarity on how SSA applies the earnings test in your FRA year: If you earned $20,000 from January through March (before reaching FRA in April), you're well under the higher $59,520 threshold for those months, so no benefits would be withheld. If you had earned $70,000 in those three months, you would have exceeded the threshold by $10,480. SSA would then withhold $1 for every $3 over the limit, meaning approximately $3,493 would be withheld from your benefits. The good news is that starting in April (your FRA month), your earnings have no impact whatsoever on your benefits - you could earn $1 million and still receive your full SS payment.
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Layla Sanders
•This is super helpful! I was well under that higher limit in the first quarter, so I should be fine. One more question - if they had needed to withhold benefits, would they take it all from one month's payment or spread it out?
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Oliver Alexander
•They typically withhold full monthly payments until they've covered the amount that needs to be withheld. So if your monthly benefit is $2,500 and they need to withhold $3,493, they would withhold your entire payment for one month and part of another month. They don't usually reduce each month's payment by a small amount spread throughout the year.
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Lara Woods
Just a heads up that sometimes there's confusion between full retirement age (FRA) and normal retirement age (NRA). They're actually the same thing - SSA just changed terminology over the years. And there's also confusion with the term "retirement year" which isn't really an official SSA term. What matters is the year you reach your FRA and the month you reach your FRA. As others have said, once you hit that FRA month, the earnings test disappears completely.
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