Social Security earnings limit confusion - monthly vs. yearly limits when approaching FRA in 2025
I'm in a bit of a predicament with my part-time job and Social Security early retirement benefits. My workplace is desperately short-staffed, and I just got a nice hourly wage bump (wasn't expecting that!). I'm well under the annual earnings limit for 2024, but if I pick up just 2-3 extra shifts each month, it would push me over the $1,860 monthly limit. My Full Retirement Age is June 2025, so I'm getting close. Three questions keeping me up at night: 1. If I exceed the $1,860 in some months but stay under the annual limit, will SSA still hit me with the penalty for those months? Or do they only care about the yearly total? 2. For 2025, since I reach FRA mid-year, do different earnings limits apply to me for January-May compared to after June? How does that work exactly? 3. Has SSA announced the 2025 earnings limits yet? I'm trying to plan ahead. I get that earning more now could increase my benefit calculation, and I'd eventually get back any withheld benefits... but HOW exactly does that recalculation work, and WHEN would I see those returned benefits? Trying to make smart choices here but the rules are so confusing! Anyone dealt with this situation before?
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Sean Matthews
SSA looks at both monthly and yearly. It's confusing but if you go over in a month they'll take away benefits BUT there's a grace year the first year you start working so if you stay under annual you should be ok. In 2025 the limit goes way up once you hit your birth month. Not sure what the new 2025 limits are yet, usually announced in OCT
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Mikayla Brown
•Thanks for responding! So the grace year thing might help me this year? I didn't know about that. Do you know if they automatically apply that or do I need to contact them about it?
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Ali Anderson
Let me clarify a few points about the earnings test: 1. The SSA applies BOTH monthly and annual tests. However, they offer a "grace year" - typically the first year you retire - where only the annual limit matters if you stay under it for the year. If this is your first year working while collecting early benefits, this could apply to you. 2. For 2025, since you reach FRA in June, you'll have two different limits: - January-May: You'll be subject to the regular early retirement limit (currently $22,320/year or $1,860/month for 2024) - June-December: A much higher limit applies in the year you reach FRA for the months before your FRA month (currently $59,520/year for 2024, which breaks down to $4,960/month) - After June (your FRA): No earnings limits whatsoever! 3. The 2025 limits haven't been announced yet. They're typically announced in October with the COLA increase. As for getting benefits back: Any month you lose benefits due to excess earnings will be included in a recalculation when you reach FRA. SSA will adjust your reduction factor and increase your monthly benefit going forward.
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Mikayla Brown
•This is SO helpful, thank you! So to make sure I understand correctly - from January-May 2025, I'm still limited to whatever the 2025 equivalent of $1,860/month is. But then starting in June 2025 when I hit my FRA, there's no limit at all? That's going to make a huge difference in my planning.
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Zadie Patel
I went through this exact situation last year! The monthly test is frustrating, but yes, there's a "grace year" provision that most SSA reps don't even mention. In your grace year (first year you retire), if you earn over the monthly limit but stay under the annual limit, they won't take anything back. But you need to be careful - this only applies ONCE. For 2025, you'll have the regular limit until May, then in June - NO LIMITS AT ALL once you hit FRA! It's not that you get the higher limit in your FRA year - you get the higher limit for the months BEFORE your FRA month in that year, then NO limits after. The 2025 limits aren't published yet but they're usually announced with the COLA in October. Expect around a 2.5-3% increase from 2024 limits based on inflation trends. And yes, any benefits they withhold will come back gradually after FRA through a recalculation. They essentially credit you for the months they withheld benefits. Hope this helps!
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A Man D Mortal
•This is wrong actually, the higher limit doesnt apply for the whole year of FRA. The higher limit only applies for months BEFORE your FRA month in that year. Then no limits after you hit FRA month.
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Zadie Patel
Sorry, I wasn't clear in my explanation. You're absolutely right! The higher limit only applies to the months BEFORE your FRA month in your FRA year, then no limits after. I'll edit my post to fix that. Thanks for the correction!
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Declan Ramirez
OMG I'm in almost the SAME boat!!! Turning FRA in August 2025 and SO confused about all this. Been trying to call SSA for THREE DAYS and kept getting disconnected or told the wait is 2+ hours!!!! SO FRUSTRATING!!!!! Did anyone else have trouble reaching SSA to get this stuff explained??? How did you finally get through???
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Emma Morales
•I had the same problem trying to reach SSA about my earnings limit questions last month. After getting disconnected four times, I found this service called Claimyr that got me through to a real person at SSA in about 20 minutes instead of hours. They basically call SSA for you and connect you when an agent is ready. Saved me so much frustration! You can see how it works at https://youtu.be/Z-BRbJw3puU or check out their site at claimyr.com They helped me confirm that I was understanding the monthly vs. annual earnings test correctly. Turns out I qualified for the grace year provision and didn't even know it!
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Katherine Hunter
my sister had this problem. she went over by like $100 one month and they took her whole check the next month! but she called and complained and they gave it back to her when she explained she was under for the year. squeaky wheel gets the grease is all im saying lol
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Mikayla Brown
Update: I called SSA today (finally got through!) and confirmed that since this would be my first year working while receiving benefits, I do qualify for the grace year provision. The rep said as long as I stay under the annual limit for 2024, I won't be penalized for going over in certain months. She also confirmed that for 2025, I'll be subject to the regular limit from January-May, and then NO limits once I reach FRA in June. She couldn't tell me the 2025 limits yet but said they should be announced around mid-October with the COLA. Thank you all for your help - this community is amazing!
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Ali Anderson
•That's great news! I'm glad you got confirmation about the grace year provision. That gives you much more flexibility for the rest of 2024. And yes, once you hit your FRA month in June 2025, you can earn as much as you want with no impact on your benefits. Congratulations on getting closer to that milestone!
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Sean Matthews
just be careful with the grace year thing. my uncle thought he had that but turns out he already used it the year before when he briefly went back to work. they don't tell you when you've used it up unless you specifically ask!!
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