Social Security earnings limit confusion at 63 - monthly vs. annual clawback process?

You're mostly correct, but let me clarify how the "grace year" rule works. In the first year of retirement, SSA applies a monthly earnings test rather than the annual test. Your husband can receive benefits for any month he earns under the monthly limit ($1,950) AND doesn't perform substantial services in self-employment. If he exceeds the monthly limit in November or December 2025, he simply won't receive benefits for those specific months. The withholding doesn't automatically roll into 2026. In 2026, they'll switch to the annual earnings limit (about $21,240 for someone under FRA). If he exceeds that annual limit, then yes, they'll withhold future benefits at the rate of $1 withheld for every $2 over the limit. Just make sure he reports his expected earnings to SSA when he applies so they can adjust appropriately from the start.

I went through this EXACT situation with my wife last year! The monthly earnings limit was a lifesaver for us. Here's what happened: she retired in September, filed for SS benefits, but had already earned over the annual limit from January-August. SSA looked at each month individually starting in September. Any month she earned under the monthly limit, she got to keep her full benefit. Any month she went over, she didn't receive a benefit. In your husband's case, make SURE he reports his expected earnings when he files in November. If he's going to earn over $1,950 in November, tell them! They simply won't send a payment for that month. Much cleaner than getting overpayments. Also remember that only wages count in the month they're earned, not when they're paid. So if he gets a final paycheck in December for November work, that counts for November's limit.

Wait a sec... I'm confused why you're worried about the earnings limit for your husband if you're waiting until 70 to file? The earnings limit doesn't apply once you reach your Full Retirement Age (66+), so if your husband is 63 and you're waiting until 70, doesn't that mean you're older than him? Or did I misunderstand something here?

Omg the earnings limit is such a nightmare!!! I had to pay back $4800 last year because I didn't understand it 😩 Make SURE you tell SSA exactly what your husband will earn. Don't estimate low. And keep track of everything! Also watch out for special payments like sick pay, vacation pay, etc... those count too! Call SSA directly to confirm everything. The website info is soooo confusing and doesn't cover all situations.

You've got most of it right, but here's something important nobody's mentioned yet: if your husband plans to earn substantially in November 2025 before filing, he should consider waiting until December to apply with a January 2026 start. That way, he'll be working with the annual limit for 2026 ($21,240-ish) rather than dealing with monthly limits for just one or two months in 2025. Also, remember that only earned income counts toward the limit - not investment income, pension payments, or other unearned income. And your strategy of waiting until 70 is smart! Each year you delay past your FRA increases your benefit by 8%, which is a guaranteed return you can't beat elsewhere.

If you're struggling to reach someone at Social Security to get clarification on the earnings limit, try using Claimyr (claimyr.com). It helped me get through to an agent in under 10 minutes after spending days trying to reach someone. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU I had a similar earnings limit question with my husband retiring early, and getting clear answers directly from SSA saved us from making a costly mistake. Totally worth it to speak with someone who can look at your specific situation rather than trying to figure out these complicated rules on your own.

To answer your follow-up questions about bonuses and timing: 1. For year-end bonuses: Under Social Security rules, bonuses count when they're earned, not when they're paid. However, a year-end performance bonus is typically considered earned when it's paid. So if your husband receives a bonus in December 2025, that would likely count toward December's earnings. 2. Regarding starting benefits in January 2026: If he begins benefits in January 2026, that becomes his "grace year" and he can use the monthly earnings test for all of 2026. This means he could earn any amount in January-November but still receive benefits for any month he earns under the monthly limit (which will be slightly higher in 2026 due to COLA). These earnings test rules are genuinely confusing, so it's smart to plan carefully. I'd recommend scheduling an appointment with SSA about 3-4 months before your husband plans to retire to discuss your specific situation.