Social Security earnings limit confusion - do pre-retirement earnings count when taking widow benefits before FRA?

For the year you first retire, Social Security offers a special "monthly earnings test" rather than just looking at annual earnings. This means they'll only count earnings in months AFTER you begin receiving benefits. So your $31,000 from January-July won't count against you if you truly stop working in July. However, those September paychecks for unused vacation are tricky. SSA usually counts income when you receive it, not when you earned it. So those September checks might count against your monthly limit (about $1,860/month in 2025). I recommend getting this documented in writing from SSA before you apply. Ask specifically about how they'll treat those vacation payouts.

I went thru the EXACT SAME THING last year!!! The SSA reps kept giving me different answers too and it was SO FRUSTRATING!!! My sister-in-law works at H&R Block and she told me that for the first year only, SSA uses the monthly test like the other person said. BUT when I got my vacation payout they counted it in the month I received it even tho I earned it before retiring!!! I went over the limit and they reduced my widows benefits and now I have to pay some back. 😡😡😡

The previous responses are correct about the monthly earnings test in your first retirement year. This is covered in SSA's POMS section RS 02501.021. For your vacation payout, it depends on how your employer reports it. If it's reported as regular wages on your W-2 in the month paid, it will count toward that month's earnings test. If it's reported as a special wage payment for work done in a previous period, it might not count. You should ask your employer exactly how they'll report those final payments. Then get confirmation from SSA in writing about how they'll treat those specific payments in your case.

I'm having the same issue! It's so confusing trying to understand these rules. From what I've researched, the monthly test is supposed to help us in our first year of retirement. Has anyone actually successfully used this rule without problems? I'm nervous about triggering an overpayment.

When I tried calling SSA about a similar question last month, I couldn't get through after trying for DAYS. The hold times were ridiculous and I kept getting disconnected. I finally used Claimyr (claimyr.com) and got through to a real person in about 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent I spoke with confirmed that for the first year you claim benefits, they only count earnings in months when you're receiving benefits if you've retired. But lump sum vacation payouts are tricky and depend on how they're coded by your employer.

Be VERY careful with this!!! SSA has been cracking down on earnings limit violations and sending out tons of overpayment notices lately. Their systems often don't properly apply the monthly test automatically - it often takes a manual review. I'd recommend: 1. Get something IN WRITING from SSA about your specific situation 2. Keep detailed records of your last day of work 3. Ask your employer to provide a letter stating when your employment ended 4. For those vacation payouts, ask your employer if they can code them as special wage payments (not current earnings) Don't trust verbal answers from SSA representatives - half of them don't understand their own rules!

my mom had same issue last yr. they DO use the monthly test like everybody is saying but u need to make sure ur employer doesnt keep u on the books as an employee after july. my moms employer kept her as 'active but on leave' and it messed up her benefits big time

One other important thing to consider - since you're taking widow benefits before your FRA, you're receiving a permanently reduced amount. Have you considered whether it might be better to: 1. Wait until FRA for unreduced widow benefits, or 2. Take your own retirement at 62 and switch to widow's at FRA, or 3. Take widow's now and switch to your own at 70 The best strategy depends on your relative benefit amounts. SSA won't automatically give you the highest combination over your lifetime - you have to figure this out yourself.

After reviewing your complete situation: 1. For the earnings test, you're on the right track using the monthly test in your first year 2. Your strategy of taking reduced widow benefits now and switching to your own at 70 is actually optimal given the benefit amounts you've shared 3. For those vacation payouts, request Form SSA-131 (Employer Report of Special Wage Payments) from your employer to document that those payments were for work performed before your benefits began Keep all documentation showing your retirement date and submit the SSA-131 as soon as possible to avoid any incorrect application of the earnings test.