Social Security earnings limit confusion - monthly vs. annual restrictions after starting benefits before FRA

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.

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

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!!

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!

wait im confused about something else - does the limit go away completely when you hit full retirement age? im 66 and still working fulltime

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!!

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.

I went through this exact situation when I started collecting at 64 two years ago! Your financial advisor is absolutely right - the monthly limit ($1,850 for 2025) only applies in your first calendar year of receiving benefits. Starting January 2026, it switches to just the annual limit. One thing that really helped me was keeping detailed records of my monthly earnings throughout that first year. I created a simple spreadsheet tracking each month to make sure I stayed under the $1,850 limit. Also, remember that if you do go over in a particular month, you only lose benefits for THAT month - it doesn't affect other months in your first year. The key thing to remember is that this monthly test is actually designed to help people like us who start benefits mid-year. Without it, if you earned your full salary for part of the year before retiring, you might exceed the annual limit even if you're not working at all after starting benefits!

Just to add one more important detail that helped me when I was in your situation - make sure you understand what counts as "earnings" for the test. It's specifically wages from employment and net earnings from self-employment. Things like pensions, 401k withdrawals, investment income, and other retirement distributions DON'T count toward the earnings limit. I was overly cautious my first year and avoided taking some retirement account distributions thinking they would affect my Social Security benefits, but they don't! Only actual work income counts. This distinction can really help with your financial planning during that transition period. Also, if you're planning to work part-time, consider whether you can control the timing of your paychecks in that first year to stay under the monthly limits. Some people coordinate with their employers to ensure they don't accidentally exceed $1,850 in any given month.

As someone who just went through this exact situation last year when I started benefits at 62, I can confirm your advisor is absolutely correct! The monthly earnings test ($1,850 for 2025) only applies during your first calendar year of receiving benefits. Starting January 2026, you'll be subject to just the annual limit ($22,320 for 2026, though they usually announce the exact amount closer to the year). One thing I wish someone had told me is to keep really good records of your monthly earnings during this first year. I used a simple notebook to track each paycheck and made sure to account for any bonuses or overtime that might push me over the monthly limit. Also, remember that the earnings test looks at when you EARN the money, not when you receive it - so if you work in December but get paid in January, that December work counts toward December's limit. The good news is that once you hit your Full Retirement Age, all earnings limits disappear completely and any benefits that were previously withheld get added back to your monthly payments as a recalculation. Hang in there - the rules are confusing but you'll get through it!

As someone who just started navigating Social Security at 64, I can't thank everyone enough for these detailed explanations! This community is incredible - I was so confused when I first read about the earnings limits, but now I feel like I actually understand how it works. Just to make sure I have this right: in 2025 (my first year), I need to stay under $1,850 per month, and if I go over in any specific month, I only lose benefits for that month. Then starting 2026, it switches to the annual limit of around $22,320, and they look at my total yearly earnings instead of monthly. And once I hit my FRA, no more limits at all! I'm definitely going to set up that tracking spreadsheet someone mentioned and talk to my part-time employer about paycheck timing. It's such a relief to know that my 401k withdrawals and pension don't count toward the earnings limit - I was being way too cautious about that. One question for those who've been through this: do you report your monthly earnings to SSA proactively, or do they just figure it out from your tax records later? I want to make sure I'm doing everything properly from the start.