Social Security earnings limit confusion - does monthly limit continue until full 12 months or switch to annual in January?
I started receiving Social Security retirement benefits in September 2024 at age 63. I know there's an earnings limit during the first year and I've been careful with my part-time job to stay under the monthly limit ($1,870/month I believe). What I'm confused about is what happens in January 2025. Do I switch to the annual earnings limit at that point, or do I need to continue with the monthly limit until August 2025 (which would complete my first 12 months on benefits)? My financial planner and my brother-in-law (who's been on SS for years) gave me completely different answers! I'd really appreciate some clarity because I might pick up more hours at work in the new year if I can use the annual limit instead of monthly. Thanks for any help!
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Effie Alexander
Great question! In January 2025, you'll switch to the annual earnings limit regardless of when you started collecting benefits. The monthly earnings test only applies during the calendar year when you first claim benefits. So from January 2025 onward, you'll be subject to the annual limit (which will likely be around $22,320 for 2025 if you're under FRA). This means you can earn more in some months as long as your total for the year stays under the limit. Just be aware that if you exceed the annual limit, SSA will withhold $1 in benefits for every $2 you earn above the limit.
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Hugh Intensity
•Thank you so much for the clear explanation! That's a relief to hear. My brother-in-law had me worried I'd be stuck with monthly limits for a full year from my start date. This means I can take on that seasonal project in February that would've put me over the monthly limit but will be fine under the annual calculation.
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Melissa Lin
watch out cause they ALWAYS mess this up!! i went over by like $300 in 2023 and they took back $1500 from me!! had to fight for MONTHS to get it fixed. make sure u keep ALL ur paystubs
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Lydia Santiago
•Same thing happened to my husband! SS said he went over by $600 but turned out they counted some money twice. Took forever to straighten out. Keep good records!
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Romeo Quest
Are u sure about using annual limit in January? I thought it was 12 months from when you start benefits. My friend Judy did her benefits in April and they made her use monthly until the next April. Maybe it's different for everyone?
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Val Rossi
•Your friend Judy received incorrect information or there was a misunderstanding. According to SSA rules, the monthly earnings test only applies for the remainder of the calendar year in which you first receive benefits. Starting January of the next calendar year, the annual earnings test applies, regardless of when you started receiving benefits. This is clearly explained in SSA's Program Operations Manual System (POMS) section RS 02501.030. The grace year provisions only apply during the calendar year of entitlement, not for a full 12 months after starting benefits.
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Eve Freeman
When I went through this back in 2022, I spent 3 weeks trying to get someone at SSA on the phone to confirm this exact question. Called literally 40+ times, either got disconnected or was on hold for hours. Finally I used this service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in under 20 minutes. They confirmed exactly what others are saying here - the monthly limit is only for the calendar year you start benefits, then in January you switch to the annual limit. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU Worth checking out if you need to speak with SSA directly.
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Melissa Lin
•never heard of that service but i'm gonna try it next time!! spent 4 HOURS on hold last month and then got disconnected right when someone picked up. almost threw my phone out the window lol
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Clarissa Flair
I think everyone is ignoring that the earnings limit changes when you reach your full retirement age. The earnings limit is different the year you reach FRA and then goes away completely the month you reach FRA. The question is asking about 2025 so we need to know if that's when the person reaches FRA.
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Hugh Intensity
•Thank you for bringing this up! I'll reach FRA (66 and 6 months) in 2027, so I'll still be subject to the earnings limit in 2025. But good point that the rules change during the year someone reaches their FRA.
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Val Rossi
•Correct - there are three different earnings limit situations: 1. Years before the year you reach FRA: $22,320/year limit (estimated for 2025) 2. The year you reach FRA: $59,520/year limit (estimated for 2025), but only counting earnings before the month you reach FRA 3. Month you reach FRA and beyond: No earnings limit Since OP won't reach FRA until 2027, they'll be under the first scenario for 2025.
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Lydia Santiago
just want to add my two cents i started benefits last march and in january i started using the annual limit not monthly. they explained it when i applied but the ssa guy talked so fast i barely caught it lol
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Romeo Quest
Curious what happens if you do go over? Do they just stop sending checks or do they want money back? I'm thinking of starting benefits next year but still working part time and worried about accidentally going over.
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Effie Alexander
•If you go over the earnings limit, SSA will withhold future benefit payments to recover the overpayment - they withhold $1 for every $2 you earn above the limit. They typically don't ask for an immediate repayment unless there's no other way to recover the funds. If you're planning to work substantially, you might want to calculate whether it makes financial sense to claim benefits early or wait until you're closer to FRA. Sometimes it's better to delay benefits if you're still earning good income.
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Melissa Lin
my niece works for ssa and she told me its the CALENDAR year not 12 months from when u start. so yeah january is when it switches to annual
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Hugh Intensity
Thank you all for the super helpful responses! This clarifies everything for me. I'll make note of the 2025 earnings limit when they announce it and plan my work schedule accordingly. It's such a relief knowing I can earn more in some months as long as I stay under the annual limit for the year.
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Ravi Kapoor
Just wanted to add that if you're planning to work more hours in 2025, it's worth noting that the annual earnings limit typically gets adjusted each year for inflation. The SSA usually announces the new limits in October/November for the following year, so keep an eye out for the official 2025 amount. Also, remember that only wages and self-employment income count toward the limit - pensions, investment income, and other retirement distributions don't count. Good luck with your seasonal project!
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