Social Security earnings limit confusion - part-time school bus driver with 12-month pay schedule

Great question about the earnings test! Social Security only cares about when you RECEIVE the income, not when you earned it. So if you're getting $2,200 monthly checks throughout all 12 months, they'll count the full $26,400 for the annual earnings test (which is $22,320 for 2025 if you're under FRA the whole year). Your wages count in the year you receive them, regardless of when the work was performed. As for when to start collecting, that entirely depends on your financial situation, health, and expected longevity. Starting at 62 means permanently reduced benefits (about 30% less than FRA), but you collect for longer.

same exact situaton for me!! been driving for 12 yrs now. I decided to wait until FRA (66+8mo for me) becuz the earnings limit is a HUGE headache. they take $1 for every $2 you go over! my brother started early and regrets it big time, always worrying if he worked too much overtime. if u can wait, I would. but its your choice obvs

This is one of those weird SSA rules that catches people by surprise. For the annual earnings test, it's when you RECEIVE the money that counts, not when you earned it. I actually had this exact situation when I drove a school bus! If your school offers a 9-month payment option, that might help you stay under the limit for 3 months of the year. But honestly, if you're going to keep working at that income level, waiting until your FRA to claim is probably smarter - then there's no earnings test at all.

Everyone's giving advice about the earnings test, but NOBODY'S mentioned that school bus drivers in many states have something called the Windfall Elimination Provision (WEP) that might reduce your Social Security!!! Did your school district pay into Social Security or do they have a separate pension system????

I tried calling SSA for MONTHS to get answers about my earnings after I retired from teaching, but couldn't get through. Finally used a service called Claimyr (claimyr.com) that got me connected to an agent in 20 minutes! They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. The agent explained exactly how my earnings would affect my benefits. Worth it to get the right info directly from SSA.

As someone who's been through this exact scenario, here's my two cents on WHEN to claim: Look at your overall financial picture. If you need the money now, claiming at 62 might make sense despite the reduction. BUT, if you can wait until FRA, not only will you get your full benefit amount, but you'll also completely avoid the earnings test headache. Remember: 1) Every year you wait past 62 increases your monthly benefit by roughly 8%, 2) The earnings limit goes away entirely at FRA, and 3) Your benefit amount affects survivor benefits if you're married. Don't just focus on the short-term!

Important clarification on the earnings test: Social Security uses a complex formula to determine how much to withhold when you exceed the annual limit. They don't necessarily withhold benefits evenly throughout the year. If you're going to earn more than the annual limit ($22,320 for 2025 if under FRA the whole year), they might withhold several full months of benefits rather than reducing each month a little bit. This can create cash flow challenges if you're not prepared for it. You can find the exact formula on the SSA website or by calling them directly.

I just remembered something else that might help u!! If ur gonna keep working can u maybe pick up some summer routes?? My district pays more for summer school routes AND then u would actually be working those summer months too so it feels more fair with the earnings test thing