Social Security earnings limit confusion - does $100k income in 2024 affect benefits if I start collecting in December?

The earnings test is more nuanced than most people realize. For the first year you claim benefits, SSA applies a monthly earnings test rather than the annual limit. So for December 2024, you'd only need to stay under about $1,800 for that specific month (roughly $21,240 ÷ 12). As for when income counts - SSA generally counts earnings when they're earned, not when they're paid. So your November work that gets paid in December would count toward November's earnings. However, bonuses and commissions can be trickier and sometimes get counted when paid. If you're fully retiring in November and won't have any more work activity, just the payments coming in, you might be fine to start in December. But if that bonus is substantial, you might want to consider waiting until January.

This earnings limit stuff is SO CONFUSING!!! I started my benefits last year at 62 and got hit with a HUGE reduction because nobody explained this to me properly. My accountant said something about them taking $1 away for every $2 I earned over the limit. I ended up having to pay back almost $7,000 in benefits because I kept working! The whole system is designed to trick us!

The first commenter is correct about the monthly earnings test for your first year of retirement. This is called the "grace year" provision. Here's how it works specifically for your situation: 1. In your first year claiming benefits, SSA will apply a monthly test only for the months you're entitled to benefits (December in your case) 2. For that month, you cannot earn more than $1,770 (the 2024 monthly limit) through actual work activities 3. Money earned earlier in the year doesn't count against your December benefit 4. But be careful about when income is actually considered "earned" - for wages it's when the work was performed, but for self-employment it's when received (unless it was accrued earlier) Your November paycheck paid in December doesn't count toward December earnings. Your bonus might be counted differently depending on when it was earned/accrued. If you want absolute certainty, waiting until January eliminates these complications.

i went thru something similar last year. call social security directly to check, don't trust internet advice. took me 6 tries to get thru to someone but worth it. they told me different info than i got online.

Just to add a bit more confusion to this whole mess - the earnings limit increases the year you reach Full Retirement Age, and then disappears entirely once you hit FRA. So if you're turning FRA in 2025, the limit would be much higher (around $56k for months before your FRA month). Also, they'll recalculate your benefit later and give some of that money back after you reach FRA - it's called the Adjustment to the Reduction Factor. But who wants to wait years to get their money back? The whole system is just ridiculous.

Regarding your bonus question: Annual bonuses can be tricky. If the bonus is clearly for work performed throughout 2024, but paid in December, SSA would typically prorate it across the months it was earned, not just count it toward December. As for commissions paid in January 2025 for work done in 2024, those would typically count when earned (2024), not when received. However, this is precisely the kind of situation where you should get a definitive answer from SSA directly. And yes, to be 100% clear - under the grace year provision, your January-November earnings of $100k won't affect your December benefit as long as you earn under the monthly limit in December itself. The Adjustment to the Reduction Factor mentioned by another commenter is indeed automatic - SSA will recalculate your benefits when you reach FRA to account for months where benefits were withheld due to earnings.

I'm just curious - why not wait until FRA so you don't have to worry about ANY of this nonsense? You're giving up 20-30% of your lifetime benefit amount by claiming early anyway.

Just a quick note on contacting SSA that might save you some frustration. In addition to what others mentioned about difficulty reaching them by phone, make sure you have detailed notes ready when you do connect with someone. Specifically ask them: 1. How your December-paid annual bonus will be treated under the earnings test 2. How your January-paid commissions for 2024 work will be counted 3. Ask them to document these answers in your file Also, if you're near a local SSA office, sometimes an in-person appointment can be easier than phone calls for complex situations like yours. Book online to avoid long waits.