Social Security earnings limit confusion - can I earn $59k or $22k before FRA in August 2025?
I'm hitting my full retirement age (FRA) in August 2025 and planning to apply for my Social Security retirement benefits then. I'll keep working as a high school science teacher throughout this transition. My coworker and I are having a serious disagreement about the earnings limit that applies to my situation. My coworker insists I can only earn about $22,000 in 2025 without facing benefit reductions if I start taking SS in August 2025. But I read somewhere that in the year I reach FRA, I can earn up to around $59,000 before my FRA month without penalty. Which one is correct? Does the higher earnings limit ($59k) apply to my entire income for 2025 up until August, or is my coworker right about the lower limit? I don't want to lose any benefits, but I also don't want to unnecessarily delay if I don't have to. Thanks for helping settle this debate!
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Ravi Choudhury
You're right and your coworker is wrong. In the year you reach your full retirement age, you're subject to a higher earnings limit and a more favorable penalty calculation. For 2025 (assuming similar increases to recent years), the earnings limit for people reaching FRA during that year will likely be around $59,520, and that only applies to earnings BEFORE the month you reach FRA. Once you reach your FRA month (August 2025 in your case), there is NO earnings limit whatsoever. Also important: in your FRA year, SSA only withholds $1 in benefits for every $3 you earn above the limit (not the usual $1 for $2 that applies to years before your FRA year). Your coworker is probably thinking of the lower annual limit that applies to people who won't reach their FRA at all during 2025, which will likely be around $22,320 next year.
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Isabella Silva
•Thank you SO MUCH for clarifying! So if I understand correctly, I can earn up to about $59,520 from January through July 2025 without any penalty, and then starting in August (my FRA month) I can earn unlimited amounts with no impact on my benefits at all? This is a huge relief since my teaching salary would definitely put me over that $22k number.
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Freya Andersen
isnt it different for teachers tho? my sister works for public school and has some kind of offset or windfall thing that reduces her SS even at full age
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Ravi Choudhury
•You're thinking of the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO), which is completely different from the earnings test being discussed here. Those provisions can reduce benefits for people who receive pensions from jobs where they didn't pay Social Security taxes. But many teachers DO pay into Social Security, and if the original poster has been paying Social Security taxes throughout their teaching career, WEP/GPO wouldn't apply to them at all.
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Omar Farouk
Just went through this exact scenario last year! Your coworker is DEAD WRONG. I reached my FRA in May 2024 and the higher earnings limit absolutely applied to me. I was able to make about $57,000 from January to April without any penalties, and then after May I earned another $45,000 with no impact on my benefits whatsoever. The key is that they only count earnings BEFORE the month you reach FRA. And they only take $1 for every $3 you go over (if you do exceed the higher limit). Also, I'd recommend applying 3-4 months before your August birthday. The process took longer than I expected!
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Isabella Silva
•This is so helpful to hear from someone who just went through it! I'll definitely plan to apply several months before August. Did you apply online or did you have to go into an office?
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Omar Farouk
•I tried to apply online but got stuck on some questions about my teaching pension. Ended up calling for weeks trying to get through to someone. Finally used a service called Claimyr (claimyr.com) that got me connected to an SSA agent in under 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. Made things so much easier and I was able to complete my application over the phone.
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CosmicCadet
The two different earnings limits confused me too when I applied last yr. There's actually 3 different rules depending on your age: - Before the year you reach FRA: lower limit (around $22k in 2025) - During the year you reach FRA but before your FRA month: higher limit (around $59k in 2025) - Month you reach FRA and beyond: no limit at all So you only need to worry about the $59k limit for January-July 2025.
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Chloe Harris
I don't understand why everyone is so obsessed with taking SS right at FRA. If you're still working full-time as a teacher why not just wait until you're 68 or 70 and get WAY more money? Every year you wait after FRA gives you an 8% increase FOR LIFE. That's free money!!!!
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Isabella Silva
•That's a fair point, but in my case I have some health concerns that run in my family. I'd rather start collecting at my FRA and have guaranteed income while I'm still healthy enough to enjoy it. The 8% increase is great, but not if I don't live long enough to break even on the delayed benefits.
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Chloe Harris
•Makes sense in your situation then. Everyone's different. My dad waited till 70 and got 32% more than his FRA amount and he's still going strong at 87!
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Diego Mendoza
THE SSA CHEATS SENIORS!!!!! I had this EXACT situation and they STILL penalized me because they counted my ENTIRE year's income even though the rules say they shouldn't!!!! I spent 9 MONTHS fighting with them to fix it. The people on the phone have NO IDEA what the actual rules are!!! MAKE SURE you get everything in writing and keep copies of EVERYTHING. They'll try to take your money if you're not watching them like a hawk!!!!
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Ravi Choudhury
•I'm sorry you had that experience, but it sounds like there was a mistake in how your case was handled. The rules are very clear about counting only pre-FRA month earnings in your FRA year. If you were penalized incorrectly, that's a processing error, not standard SSA policy. They do make mistakes sometimes, which is why keeping good records is indeed important advice.
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Freya Andersen
my mom says just call them and ask? they have a hotline
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Diego Mendoza
•GOOD LUCK WITH THAT!!! I called 15 TIMES and got 15 DIFFERENT ANSWERS from SSA!! Half the representatives don't even know their own rules!!!
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Omar Farouk
•The hotline is a nightmare these days. Average hold time is over 90 minutes if you can even get through. If you need to talk to SSA, use Claimyr. Saved me hours of frustration.
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Anastasia Popova
One crucial detail that hasn't been mentioned: the earnings limit only applies to wages or self-employment income. If you have investment income, interest, dividends, capital gains, pension payments, or annuity payments, those don't count toward the earnings test at all. Only the money you actively earn through working counts. Also, if you do exceed the limit and have some benefits withheld in 2025, you'll get those withheld benefits back gradually after you reach FRA through a recalculation of your monthly benefit amount. So it's not permanently lost money, just temporarily withheld.
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Isabella Silva
•I didn't know about getting the withheld benefits back later! That's great information. My salary is my only significant income, so I don't need to worry about the other types of income. Thanks for adding these important details.
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CosmicCadet
BTW the exact 2025 numbers haven't been announced yet right? These are just estimates based on 2024?
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Ravi Choudhury
•Correct. The exact 2025 limits will be announced by SSA later this year (probably October 2024) after they calculate the annual COLA (Cost-of-Living Adjustment). But based on recent years' patterns, the estimates of around $22,320 for the lower limit and $59,520 for the FRA-year limit are likely to be very close to the actual figures.
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