Social Security earnings limit confusion - is it monthly or annual for first check in February?
Just got approved for early retirement benefits (62) and my first SS check comes February 2025. I'm still working part-time (only 3 days a month) at my old accounting firm during tax season. I know there's an earnings penalty since I'm taking benefits before my FRA (which is 67), but I'm confused about how SSA calculates the earnings limit. If my first check is in February, does that mean I can earn whatever I want in January without it counting toward the $22,680 annual limit? Or does SSA look at my entire year's earnings regardless of when my first check arrives? Also, do they calculate this monthly or just annually? My boss asked if I could work extra hours in January before my benefits start - would that be a smart move? Really hoping someone knows how this works! I don't want to accidentally trigger benefit reductions.
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Paolo Romano
For the first year you receive benefits, SSA applies a monthly earnings test rather than just the annual limit. So yes, what you earn in January before your benefits start shouldn't count toward your limit. However, starting in February, you'll be limited to earning 1/12 of the annual limit each month (that's about $1,890/month for 2025). If you go over that amount in ANY month after your benefits begin, you could lose benefits for that specific month. Working extra in January is a smart strategy. You might also look into the special rule for midyear retirees, which could help if you end up earning more than expected later in the year.
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Keisha Jackson
•That's really helpful, thank you! So if I understand correctly, I could work full-time in January (before benefits start), then stick to under $1,890 monthly from February-December? Does the SSA automatically track this or do I need to report my earnings somewhere?
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Amina Diop
its NOT monthly!!!! my brother got BURNED by this last year. SSA looks at your TOTAL earnings for the whole year even if you only get checks for part of it. they took back almost $4000 from him!!
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Paolo Romano
•That's not quite right. SSA has a special rule for the first year of retirement. They use a monthly earnings test for the first calendar year of retirement. Each month you're entitled to full benefits if you earn under the monthly limit ($1,890 in 2025) AND don't perform substantial services in self-employment. For years after that first calendar year, they do switch to the annual test.
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Oliver Schmidt
In my experience calling Social Security is completely USELESS for these kinds of specific questions. I spent 3 HOURS on hold last month trying to get an answer about my earnings limit situation (I'm 64 and still working part-time), and then got disconnected RIGHT when someone finally answered!!!! It's like they don't want us to understand their own rules.
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Natasha Volkov
•I had the same frustrating experience trying to reach SSA by phone until I found Claimyr. It's a service that waits on hold with SSA for you, then calls you when a rep comes on the line. Saved me hours of hold time when I needed to ask about my earnings limit situation. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU and their website is claimyr.com. Totally worth it for complicated questions like this that you really need an SSA agent to answer officially.
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Javier Torres
I ran into this same issue when I started collecting at 65 last year. To clarify what others have said: SSA looks at what you earn AFTER you start receiving benefits. So anything you earn in January wouldn't count toward your limit since your benefits start in February. After that, there are two ways they can count your earnings: 1. Monthly test: For the rest of 2025, you can earn up to $1,890 in any month and still get benefits for that month (regardless of yearly total). 2. Annual test: If you earn over $22,680 for the year, they'll withhold $1 in benefits for every $2 you earn above the limit. If you're only working 3 days a month, you're probably fine, but you should estimate your monthly income to make sure it stays under $1,890. Working extra in January is definitely smart!
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Keisha Jackson
•This makes so much sense now! So for February-December, I need to stay under $1,890 each month to avoid any penalties. And you're right, at 3 days/month I should be fine (I make about $1,500/month at my current hours). I'll definitely schedule extra January hours with my boss. Thank you!
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Emma Wilson
don't forget they only count EARNED income toward the limits. if you have investment income or rental properties or alimony that doesnt count against your limit!
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QuantumLeap
I went through this same question last year. Here's what I learned: During your first year receiving benefits, Social Security applies a special monthly earnings test. Only the months you RECEIVE benefits count toward the earnings test. So January earnings don't matter at all for your situation. From February through December, you'll need to stay under the monthly limit ($1,890 for 2025) for any month you want to receive full benefits. If you earn more than that in any specific month, you won't receive benefits for THAT month. However! There's also something called the "grace year" provision that might help if you accidentally go over in a month. Worth asking SSA about directly. And yes, working extra in January is smart planning since those earnings won't count against you at all.
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Keisha Jackson
•Thank you for explaining this so clearly! I feel much better about my plan now. I'll definitely work extra in January, and be careful to stay under the monthly limit after that. Really appreciate everyone's help!
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Amina Diop
my friend says they dont even check unless you make over 30k??? has anyone heard this?
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Javier Torres
•This is extremely risky advice. SSA receives your earnings information directly from IRS tax records. They WILL catch any excess earnings eventually, and if they overpaid you, they'll demand ALL of it back - sometimes years later! Don't risk it. Stay within the proper limits.
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Oliver Schmidt
Does anyone know if the earnings limit applies to survivor benefits too? My husband passed and I'm getting his benefits at 60 (I'm 61 now) but I still work. Is it the same rules or different for survivor benefits? Sorry to hijack the thread but seems related.
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Paolo Romano
•Yes, the earnings limit applies to survivor benefits too. Since you're under FRA and receiving survivor benefits, you're subject to the same earnings limits as someone receiving early retirement benefits. The annual limit for 2025 would be $22,680, with $1 in benefits withheld for every $2 earned above that limit.
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