Social Security earnings limit confusion - does SS income count toward the annual cap?
I'm completely confused about the annual earnings limit for Social Security. I'll turn 64 next month and started taking my SS retirement benefits early last year. I know there's an earnings limit of $22,320 for 2025 since I'm under my full retirement age, but I'm confused about what counts as "earnings". Does the Social Security benefit I receive each month count toward that earnings limit? Or is the limit only for income I earn from working (like my part-time job)? My monthly SS check is about $1,850, and I make around $1,600/month at my part-time job. So annual SS income would be $22,200 plus $19,200 from working. If ALL income counts, I'd be over the limit, but if only work income counts, I'd be under it. I tried calling SSA twice but got disconnected both times. I need to figure this out ASAP because I'm deciding whether to pick up more hours at work. Thanks for any help!
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Esteban Tate
The earnings limit only applies to wages or self-employment income. Your Social Security benefits do NOT count toward the earnings limit. Only the money you make from actually working counts. So in your case, only the $19,200 from your part-time job counts toward the $22,320 limit, meaning you're still under the limit by about $3,120. You could actually work a few more hours if you wanted to and still stay under the cap.
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Alice Pierce
•Thank you so much! That's such a relief. I was getting really worried I was going to have benefits taken away. So just to be 100% clear - even other retirement income like distributions from my 401k wouldn't count toward that earnings limit either?
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Ivanna St. Pierre
Only WORK counts! SS payments dont count and neither does investment income, pension, 401k, etc. Just wages from actual employment or net earnings if youre self employed.
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Alice Pierce
•Oh that's so helpful, thank you! I've been stressing about this for weeks.
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Elin Robinson
I went through this exact same confusion last year! Called SSA like 5 times before finally getting through to someone who explained it clearly. Only money you EARN from WORKING counts. Your SS benefits, pension payments, investment dividends, 401k withdrawals - none of that counts toward the earnings limit. Just your actual wages from working.
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Atticus Domingo
•I found a way to actually get through to SSA on my first try when I needed to confirm this same thing! I used Claimyr (claimyr.com) and they got me connected to a real agent in about 20 minutes instead of waiting for hours or getting disconnected. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU - it really helped when I needed to sort out my benefits questions.
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Beth Ford
I still dont understand how they expect seniors to live on such small amounts!!! The limit should be much higher. How can anyone survive when they PUNISH us for trying to work??? Its RIDICULOUS that they take away $1 for every $2 you earn over that limit. THATs what you should be worried about!!!!!
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Morita Montoya
•While I understand your frustration, it's important to remember that the earnings test is temporary. Once you reach your Full Retirement Age (FRA), there is no earnings limit whatsoever. You can earn any amount without reduction in benefits. The earnings test only applies if you claim benefits early, before your FRA, and it's designed to reflect that Social Security is intended as replacement income when you stop or reduce working.
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Kingston Bellamy
Important nuance: if you go over the limit, they don't just start taking ALL your benefits away. They reduce benefits by $1 for every $2 you earn over the limit. So even if you went a little over, it's not catastrophic. Just something to budget for. Also, they adjust the earnings limit for inflation each year, so it usually goes up slightly.
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Elin Robinson
•Yes! And another thing people don't realize is that if they withhold some of your benefits due to excess earnings, you actually get that money back later! They recalculate your benefit amount when you reach full retirement age to account for months when benefits were withheld.
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Ivanna St. Pierre
my sister had this same confusion she thought her alimony counted turns out it didnt and she couldve been working more hours all along lol
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Alice Pierce
•That's good to know! I think there are probably lots of us confused about what counts and what doesn't.
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Kingston Bellamy
Also - make sure you understand the month of birthday rule. The earnings test works a bit differently in the year you reach Full Retirement Age. In the year you reach FRA, the limit is much higher ($59,520 for 2025) and they only count earnings before the month you reach FRA. And they only reduce benefits $1 for every $3 (not $2) you earn over that higher limit.
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Alice Pierce
•Thanks for that information! My FRA is 67, so I still have a few years before I need to worry about that part, but it's good to know for future planning.
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Beth Ford
When i started SS last year i had to quit my good payin job and find something with less hours cause of this stupid rule!! I'm still MAD they dont explain this stuff better!
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Esteban Tate
•I understand your frustration. The earnings limit can be confusing. One option for people in your situation is to wait until Full Retirement Age to claim benefits if they want to continue working substantial hours. That way there's no limit on earnings. But everyone's situation is different, and sometimes claiming early makes sense even with the earnings restriction.
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