Social Security earnings limit confusion - do they take $1 for every $2 over or $1 for every $3 in 2025?

The correct formula is that SSA withholds $1 in benefits for every $2 you earn above the annual limit. So if you earn $100 over the limit, they would withhold $50 from your benefits. For 2025, the annual earnings limit will likely be around $22,320 (it's $21,240 for 2023 and increases slightly each year). This is calculated annually, not monthly. SSA will ask for your expected earnings when you apply, but the actual accounting happens when you file your taxes the following year. If they withhold too much, you'll get money back. If you underestimated, you might owe money back.

Your question makes perfect sense! I was in the exact same boat last year. SSA has this complicated rule where they take back $1 of your SS benefit for every $2 you earn over the annual limit (different calculation in the year you reach full retirement age). I found this out the hard way and ended up having to pay back several thousand dollars! After weeks of trying to get through to SSA on the phone and getting nowhere, I discovered Claimyr (claimyr.com) which got me connected to an agent in under 15 minutes. There's even a video showing how it works: https://youtu.be/Z-BRbJw3puU. The agent explained everything and helped me adjust my withholding so I wouldn't face the same problem again. Definitely worth checking out if you need clarification directly from SSA.

THE SSA IS ROBBING US BLIND!!! They take $1 for every $2 over the limit but they don't tell you that until AFTER you've earned too much! I had to pay back $4,700 last year because no one explained this to me when I signed up!!! Why should we be PUNISHED for working??? The whole system is a SCAM designed to keep us poor and dependent!

ya both kinda wrong lol... they take $1 from ur SS check for every $2 u earn over the yearly limit. so if limit is $22k and u make $23k, ur $1k over so they take $500 from ur yearly benefits. they dont take money from ur paycheck or anything

My sister had this same issue. She retired at 63 but kept working part-time at Walmart. Social Security didn't take anything until she filed taxes the next year, then they sent her a letter saying she had to pay back about $3,400 because she went over the limit. She was so upset because she didn't budget for that. Now she keeps her hours really low to stay under the limit.

I can provide some practical information on this since I manage benefits planning for early retirees: 1. The earnings test withholds $1 in BENEFITS for every $2 OVER the annual limit 2. The 2025 annual limit will be approximately $22,800 (they announce the exact figure in October 2024) 3. This is based on gross wages or net self-employment income 4. The calculation is annual, but SSA often applies reductions monthly 5. In the year you reach Full Retirement Age (FRA), the formula changes to $1 for every $3 over a much higher limit (around $60,000) 6. After FRA, there is NO earnings limit whatsoever For planning: If you expect to earn $30,000 in 2025 while collecting benefits at age 63, you'd be $7,200 over the limit. SSA would withhold $3,600 in benefits (half of the overage). If your monthly benefit is $1,200, they might withhold 3 months of benefits completely. Your husband's age doesn't affect your earnings test, only your own age matters.

does anybody know if rental income counts toward the earnings limit? i get social security but also have a couple rental properties

just wait til ur 67 then u can make as much as u want lol thats what my uncle did

One important point no one has mentioned: If benefits are withheld due to the earnings test, you'll actually receive a recalculation and HIGHER monthly benefit once you reach Full Retirement Age. SSA will adjust your reduction for early retirement to account for months when benefits were withheld. So you're not permanently losing that money - it's more like a deferral. Many financial advisors don't explain this aspect.

When I started SS at 62, I kept working part-time at the grocery store. My daughter helped me figure out how many hours I could work without going over the limit. For 2025, if the limit is around $22,800, that means I can earn about $1,900 per month. If I made $15/hour, that's about 126 hours a month or around 29 hours per week. Hope that helps with your planning!