Social Security earnings limit confusion - monthly vs. annual restrictions after starting benefits before FRA
I started receiving my Social Security retirement benefits at 63 last month (May 2025) and I'm totally confused about the earnings test. My financial advisor told me there's a $1,850 monthly earnings limit that applies this year since I'm below FRA, but then starting January 2026, only the annual limit ($22,320 I think?) will apply. Is this correct? Some coworkers who are also collecting early are saying different things - one says the monthly limit applies forever until I reach FRA, another says it's only for the first year, and I'm not sure who to believe. Does anyone know exactly how this works? I'm planning to work part-time but don't want to mess up my benefits.
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Oliver Becker
Your financial advisor is correct. In your first year of retirement (2025), the monthly earnings test applies ($1,850/month for 2025). Beginning January 2026, only the annual earnings test will apply until you reach your Full Retirement Age. The annual limit for 2025 is $22,320 if you're below FRA for the entire year. The monthly test gives you flexibility in your first year, especially if you earned more than the annual limit before you started benefits. For example, if you earned $40,000 from January-April before retiring, you'd normally exceed the annual limit and lose benefits. But with the monthly test, as long as you earn under $1,850 each month for the rest of 2025, you'll still get your full benefits for those months.
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Amina Bah
•Thank you for explaining this! So to make sure I understand - I can earn as much as I want in any month for the rest of this year, but if I go over $1,850 in a particular month, I'd lose benefits just for that specific month? And then next year it switches to just looking at my total for the year?
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CosmicCowboy
When I started collecting at 62 (I'm 65 now), I got caught by this rule and didn't understand it either! The monthly limit is ONLY for your first calendar year of benefits. After that, SSA only looks at your annual total. I learned the hard way when I had to repay some benefits because I misunderstood how it worked. By the way, if you're having trouble getting through to SSA to ask questions (took me DAYS of calling), I discovered a service called Claimyr that gets you through to an actual SSA agent quickly. Saved me hours of frustration. Their site is claimyr.com and they have a video showing how it works: https://youtu.be/Z-BRbJw3puU
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Natasha Orlova
•does this service actually work?? ive been trying to talk to someone at SSA for TWO WEEKS and keep getting disconnected!!
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Javier Cruz
I think ur advisor is WRONG. My brother in law lost benefits for 6 MONTHS in his second year because of the monthly limit!!! The SSA takes back $1 for every $2 you earn over the limit and they DON'T CARE if its your first year or not. They're just looking to take back money from seniors who are just trying to make ends meet!!
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Oliver Becker
•I understand your frustration, but there may be some confusion here. Your brother-in-law's situation might have been different. According to SSA's own rules, the monthly earnings test only applies in the first year you claim benefits. After that, it's strictly the annual limit until you reach FRA. You're right about the $1 for every $2 withholding - that applies to both the monthly and annual tests. If your brother-in-law lost benefits in his second year, it was likely because his total annual earnings exceeded the yearly limit, not because of a monthly test.
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Emma Thompson
Just went through this exact situation! Here's what happened to me: 1) Started benefits in April 2024 at age 63 2) For remainder of 2024, monthly earnings limit applied ($1,770/month last year) 3) Starting January 2025, only annual limit applies ($22,320) What's confusing is how they apply the penalty. If you go over in 2025, they don't immediately reduce your check - they usually adjust it the FOLLOWING year. So if you earn too much this year, your 2026 benefits might be reduced. And remember - it's a $1 reduction for every $2 over the limit. Hope this helps!
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Amina Bah
•This is SO helpful - thank you! When you say they adjust the following year, does that mean if I accidentally earn too much this year, they won't take money back but will just reduce next year's payments?
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Emma Thompson
•Exactly. They typically don't demand immediate repayment. Instead, they'll withhold future benefits until they've recovered the overpayment. For example, if they determine you were overpaid $3,000, they might withhold your monthly checks until that $3,000 is recouped. It's important to report any expected income changes to them as soon as possible so they can adjust withholding appropriately and avoid large surprises.
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Natasha Orlova
wait im confused about something else - does the limit go away completely when you hit full retirement age? im 66 and still working fulltime
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Oliver Becker
•Yes, once you reach your Full Retirement Age (FRA), the earnings test disappears completely. You can earn any amount without reduction to your Social Security benefits. If you're already 66 and your FRA is 66, then you have no earnings limit to worry about. If your FRA is 67, then you'd still be subject to a higher earnings limit in the year you reach FRA, but only until the month you actually turn 67.
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Malik Jackson
My sister went thru the same thing last yr. Monthly limit the first yr then annual after. But wat really messed her up was that she didnt realize they count GROSS wages not take-home pay! So watch out for that too!!
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Amina Bah
•Oh! I didn't even think about that - I was calculating based on my take-home pay. Thanks for pointing that out!
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Isabella Costa
I remember when I started collecting early at 62 back in 2020. Had a similar confusion about the monthly vs. annual limits. Learned that in the first year, they use the monthly test as a grace to help you transition to retirement. Makes it easier if you had high earnings before starting benefits. But be careful - they don't automatically figure this out. You need to contact them if you want them to use the monthly test instead of the annual test in that first year. Don't wait for them to come asking for money back later! Also, don't forget that self-employment income counts too, not just W-2 wages. I almost got tripped up by that one since I do some consulting on the side.
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Amina Bah
•That's a great point about having to contact them specifically about the monthly test. I'll definitely keep that in mind and reach out to them. And thanks for the heads-up about self-employment income!
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