Social Security earnings limit confusion: Will my January-March income count towards the $23,400 limit when taking SS at 62?

They only count the money you earn in months AFTER you start receiving benefits. So if your first SS check is for April, then only your earnings from April-December count toward that $23,400 limit. Your January-March income doesn't matter at all for the earnings test. I went through this last year when I took early retirement at 63. The SSA rep explained that for the first calendar year, they apply the earnings test on a monthly basis. The monthly limit is the yearly limit divided by 12, which would be $1,950 per month for 2025. But again, they only look at months when you're entitled to benefits. Just make sure you report your estimated earnings to SSA when you apply!

THis is confusing. My brother told me they look at ALL your income for the year. He got in big trouble because they made him pay back some of his benefits. The government always wants to take money back even when THEY make the mistake!!

Let me clarify how this works exactly since there's some confusion here. In your first year of retirement, SSA applies what's called the Monthly Earnings Test rather than the Annual Earnings Test. If you start receiving benefits in April: 1. For January-March: Earnings don't count toward the limit AT ALL, regardless of how much you earned those months. 2. For April-December: You're subject to a monthly limit (which is the annual limit divided by 12). For 2025, that's $1,950 per month. 3. For any month you earn above $1,950, you might not receive benefits for that specific month. After your first calendar year on benefits, it switches to the annual test where timing doesn't matter - just the total for the year. This is covered in SSA's POMS section RS 02501.030 if you want to look it up.

This is why calling Social Security directly is SO important with retirement questions! I spent THREE WEEKS trying to get someone on the phone last year for this exact same question. Every time I called I was on hold for hours and then got disconnected. Finally I found a service called Claimyr (claimyr.com) that got me through to an agent in under 5 minutes. You can see how it works at https://youtu.be/Z-BRbJw3puU The agent confirmed exactly what others are saying here - first year only counts earnings after you start getting benefits, and it's a monthly test rather than annual. Totally worth the service to get a definitive answer directly from SSA.

my sister had this happen last year and they only counted what she made after she started taking SS. she retired in may and kept working a weekend job at the grocery store and they didnt care about her january-april income at all

Just want to add something important - make sure you track your earnings carefully. Keep all paystubs and if you're going to be close to the limit, report any changes to SSA immediately. If you go over the limit and they don't catch it until later, you'll end up with an overpayment notice and have to pay back benefits, which is a hassle. Also, remember that the earnings limit only applies until you reach your Full Retirement Age (FRA). After that, you can earn unlimited income with no reduction in benefits. And one last thing - they only count WAGES toward the earnings limit. If you have investment income, pension, annuities, or other non-work income, that doesn't count toward the $23,400 limit.

Also beware that sometimes the SSA automatically withholds benefits if they think you might exceed the limit. When I applied, they asked for my expected earnings. I told them I'd make about $15,000 from my part-time job after starting benefits, and they went ahead and paid me my full benefit. But I have a friend who estimated she'd make $22,000 (just under the limit), and they automatically withheld some of her benefits "just in case" she went over. She had to wait until she filed her tax return the next year to get that money back.

Does anyone know if they count gross income or net income after taxes? I always get confused about this!!

Great thread - lots of helpful info here! I'm in a similar situation and planning to retire at 62 next year. One thing I wanted to add that might help others: if you're unsure about your expected earnings, it's better to underestimate when you apply rather than overestimate. The reason is that if you underestimate and end up earning more, they'll just withhold future benefits to recover any overpayment. But if you overestimate, they might withhold benefits upfront that you're actually entitled to receive, and getting that money back can take months. Also, for anyone doing contract or freelance work after retirement, remember that they count when you EARN the money, not when you receive payment. So if you do work in December but don't get paid until January of the next year, that income counts toward the previous year's limit.

This has been such an informative discussion! I'm 61 and planning to take early retirement next year, so I've been researching the earnings limit rules extensively. One thing I'd add for anyone in a similar situation: if you're planning to do any seasonal work after starting benefits, the monthly test in your first year can actually work to your advantage. For example, if you want to do tax preparation during tax season (January-April) in your second year, you'd be stuck with the annual limit. But if you start benefits mid-year and do that seasonal work in the remaining months of your first year, you can potentially earn more overall since each month is evaluated separately. Also, I've found that the SSA's online retirement estimator tool is really helpful for playing with different scenarios. You can input various start dates and estimated earnings to see how it affects your benefits. It's at ssa.gov/benefits/retirement/estimator.html if anyone wants to check it out. One last tip: make sure you understand how your employer reports wages if you're doing part-time work. Some employers report wages when earned, others when paid. This can matter for which month the earnings count toward if you're right at the monthly limit. It's worth asking your HR department how they handle this.