Social Security earnings limit confusion - monthly vs. annual tracking of $23,400?

They track it on an annual basis, not monthly. The annual limit for 2025 is indeed $23,400 if you're under your Full Retirement Age (FRA). The monthly breakdown is just a simplified way of thinking about it. So you can earn $5,000 in January and nothing the rest of the year, and you'll be fine as long as your total stays under $23,400 for the year. SSA will only start withholding benefits after you exceed the annual threshold. However, there is one exception - the first year you claim benefits has a monthly earnings test. So if you start benefits in January 2025, for that year only, they'll look at whether you earn over $1,950 in any individual month. After your first year on benefits, it switches to the annual calculation.

The person above is partly wrong. There are actually TWO different earnings tests: 1. The annual test for everyone ($23,400 for 2025) 2. A monthly test that ONLY applies in the first year you retire In your first year, if you earn over $1,950 in any month, you won't be considered "retired" for that month and might not get benefits. After the first year, only the annual test matters. This monthly test is designed for people who retire mid-year and might have had high earnings before retirement that would otherwise disqualify them under just the annual test.

they will take away $1 for every $2 you earn over the limit. at least thats what they did to my husband when he went over last year

I went through this exact situation last year. Here's how it actually works: For the FIRST year you're entitled to benefits, you can use the monthly earnings test if it benefits you. If you earn over the monthly limit ($1,950 in 2025) in any month, you won't receive benefits for that month. However, if you're starting in January 2025, and working throughout the year, then only the ANNUAL limit ($23,400) will really matter to you. They'll calculate if you went over at the end of the year, and if you did, they'll withhold $1 in benefits for every $2 you earned over the limit. The monthly test is mostly helpful for people who retire mid-year and had high earnings before retirement. Also, remember this all goes away once you reach your Full Retirement Age - then you can earn unlimited amounts without penalty.

I HAD THE EXACT SAME QUESTION LAST YEAR!! I called Social Security 7 TIMES and got 4 DIFFERENT ANSWERS!!! One agent told me monthly limits, another said annual, a third said something completely different. The phone system is IMPOSSIBLE - waited on hold for 3+ hours each time only to be disconnected twice! Finally got through to someone who seemed to know what they were talking about. Confirmed it's an ANNUAL limit once you're past the first year. First year has special rules if you retire mid-year.

Everybody saying different things here... let me simplify. If you start benefits in January, the annual limit applies. The monthly limit is for people who retire mid-year and have big earnings before retiring. So yes, your earnings can go up and down each month, just keep the TOTAL under $23,400 for the year and you'll be fine.

To respond to your follow-up question: Yes, that's exactly right. Since you're starting in January, you'll only need to worry about the annual total of $23,400. Your monthly earnings can fluctuate above and below $1,950 as long as the annual total stays under the limit. The monthly earnings test is really designed to help people who retire mid-year and had high earnings before retiring. For example, someone who earned $60,000 January-July and then retired in August would normally exceed the annual limit and get no benefits, but with the monthly test, they can get benefits for August-December if their monthly earnings stay below the limit during those months. If you're planning to consistently work throughout the year, just focus on keeping your annual total under $23,400 and you'll be fine. SSA will review your earnings after the year ends, typically when you file your tax return.

my sister inlaw kept working after she started ss and they took back 7 months of payments from her the next year. be careful!

One more important thing to understand: if they do withhold some of your benefits because you exceed the earnings limit, it's not lost forever. They'll recalculate and increase your monthly benefit when you reach your Full Retirement Age to account for the months they withheld benefits. And remember, the earnings limit only applies to wages or self-employment income. It doesn't apply to investment income, pension payments, or other non-work income. Good luck with your seasonal work pattern - sounds like you've got a good handle on it now!

Just wanted to add one more clarification that might help others reading this thread. The SSA actually uses your reported wages from your W-2 or Schedule SE (for self-employment) to determine if you've exceeded the earnings limit, not your gross pay from individual paychecks. So if you have pre-tax deductions like health insurance premiums or 401k contributions, those reduce your "countable" earnings for the earnings test. This can be helpful if you're close to the limit. Also, Grace, since you mentioned landscaping work - if any of that is self-employment income, make sure you're keeping good records and paying quarterly estimated taxes. The earnings test applies to net self-employment earnings after business expenses. The seasonal income pattern you described is actually pretty common, and as long as you track your annual total, you should be fine!

Great thread! I'm in a similar situation and this really helped clear things up. One thing I wanted to add for anyone else reading - if you're unsure about your earnings projections, you can also contact SSA during the year to report expected earnings changes. They can adjust your benefit payments prospectively rather than having to do a big reconciliation at the end of the year. I learned this the hard way when I had an unexpectedly good year and ended up owing back several months of benefits. Now I try to give them a heads up if I think I might go over the limit so they can reduce my monthly payments accordingly. It's much easier than dealing with an overpayment situation later! Also worth noting that the earnings limit increases each year with cost of living adjustments, so the $23,400 limit for 2025 will likely be higher in 2026.

As someone who just went through this process last year, I can confirm what others have said - it's definitely confusing at first! The key thing to remember is that since you're starting benefits in January (beginning of the year), you'll be subject to the annual earnings test of $23,400 for 2025. Your seasonal landscaping work pattern is actually perfect for this - I had a similar situation with construction work. Some months I'd earn $3,000, others barely $500, but as long as my total stayed under the annual limit, I was fine. One tip that saved me: I kept a running total in a simple spreadsheet throughout the year. Every month I'd add my earnings and could see exactly how much "room" I had left under the $23,400 limit. Made it much easier to plan whether I could take on extra work during busy season. Also, don't stress too much about going slightly over - the penalty is only $1 withheld for every $2 over the limit, and like others mentioned, you get credit for those withheld benefits later when you reach full retirement age. It's not like you lose that money forever.

This thread has been incredibly helpful! I'm in a similar situation - turning 66 in November and planning to start SS benefits in January. I work part-time as a tax preparer, so my income is very seasonal (busy January-April, almost nothing the rest of the year). What I'm taking away from all these responses is that since I'll be starting benefits at the beginning of the year, I just need to focus on keeping my total annual earnings under $23,400. The fact that I might earn $4,000 in March and $200 in July doesn't matter as long as the yearly total stays under the limit. One question though - does anyone know if the earnings limit changes when you're in the year you turn FRA? I'll hit my full retirement age in November 2025, so I'm wondering if the rules change partway through that year or if I'm subject to the $23,400 limit for the entire year since I started benefits before reaching FRA.

This is such a helpful thread! I'm in a similar boat - starting SS benefits in January at 62 and working part-time. I was getting really stressed about the monthly vs annual tracking question. Reading through all these responses, it sounds like the key takeaway is: if you start benefits in January, focus on the annual $23,400 limit rather than worrying about monthly fluctuations. The monthly test is mainly for people who retire mid-year. I love the spreadsheet idea someone mentioned - I'm definitely going to track my earnings throughout the year so I know exactly where I stand. And it's reassuring to know that if you do go over the limit slightly, it's not money lost forever since you get credit for withheld benefits when you reach FRA. One thing I'm still wondering about - if you're self-employed and have irregular income throughout the year, do you need to report estimated earnings to SSA quarterly like you do for taxes? Or do they just look at your final W-2/1099 amounts at the end of the year?

This has been such an informative discussion! As someone who's been navigating the Social Security system for a few years now, I wanted to add one more perspective that might help others. The confusion around monthly vs annual tracking is totally understandable - even SSA representatives sometimes give conflicting information, as others have mentioned. What really helped me was getting the official publication "How Work Affects Your Benefits" (SSA Publication No. 05-10069) directly from the SSA website. It spells out these rules clearly in writing. For those dealing with seasonal or irregular income like landscaping, tax preparation, or construction work, I'd also recommend keeping copies of your pay stubs or invoices throughout the year. If there's ever a question about your earnings or timing, having that documentation can be really helpful. And Grace, since you're in landscaping, don't forget that if you do any side work as an independent contractor (rather than W-2 employee work), those 1099 earnings count toward the limit too, but you can deduct legitimate business expenses like equipment, gas, etc. Just something to keep in mind as you track your annual total!

This thread has been incredibly helpful! I'm starting Social Security benefits in February at 64 and was having the same confusion about monthly vs annual tracking. My situation is a bit different - I work as a substitute teacher, so my income varies dramatically from month to month depending on how many days I work. From what I'm understanding here, since I'm starting benefits early in the year, I need to focus on keeping my total annual earnings under $23,400 rather than worrying about individual months where I might earn more than $1,950. This is such a relief because some months during the school year I might work 15-20 days and earn $2,500+, while during summer break I might only work a few days total. The spreadsheet tracking idea is genius - I'm definitely going to set that up to monitor my annual total. And knowing that any withheld benefits aren't lost forever but get credited back at FRA makes this whole system feel much more manageable. Thanks to everyone who shared their real experiences - it's so much more helpful than trying to decipher the official SSA materials alone!

This thread has been incredibly thorough! As someone who works in benefits administration (though not for SSA), I wanted to add one practical tip that might help Grace and others with seasonal income. Since you're doing landscaping work, consider asking your employer if they can help spread your income more evenly throughout the year if you're getting close to the $23,400 limit. Some employers are willing to defer part of your busy-season pay to slower months, which can help with both the earnings test and your tax situation. Also, Grace, since you mentioned turning 65 in December - just remember that your Full Retirement Age is likely 66 or 67 (depending on your birth year), not 65. So you'll be subject to the earnings limit for more than just 2025. It's worth checking your exact FRA on your Social Security statement so you can plan accordingly for future years. The seasonal income pattern you described is actually quite manageable with the annual limit system - just keep tracking that running total like others suggested!

This has been such an educational thread! I'm in a similar situation - starting SS at 63 next month and working part-time as a seasonal retail manager. The confusion about monthly vs annual tracking had me really worried, but this discussion has cleared everything up. What I'm taking away is that since I'm starting benefits at the beginning of the year, I need to focus on the $23,400 annual limit rather than stressing about individual months. My retail work gets crazy during holiday season (October-January) where I might earn $3,000+ per month, then drops to almost nothing February-September. Under the annual system, this works perfectly as long as I track my yearly total. I'm definitely implementing that spreadsheet idea - seems like the best way to stay on top of things throughout the year. And it's reassuring to know that if I accidentally go over the limit, the withheld benefits aren't lost forever but get credited back at FRA. One question for the group: has anyone dealt with bonuses or commission payments that might push you over the limit unexpectedly? My retail job occasionally gives performance bonuses that I don't always see coming, and I'm wondering if there are any strategies for managing those surprise income bumps.