Social Security earnings limit confusion - still penalized when reaching FRA mid-year?

Yes, you'll still be subject to the earnings test in the months BEFORE you reach your FRA next year, but the rules are more lenient in your FRA year. For 2026, you'll have a higher earnings limit for the months before you reach FRA (probably around $60,000 annual equivalent), and they only count earnings in those pre-FRA months, not the whole year. Once you reach your FRA in July, the earnings limit goes away completely and you can earn as much as you want with no reduction. Also worth noting that any benefits withheld due to excess earnings will eventually be returned to you in the form of a higher monthly benefit after you reach FRA.

the same thing happend to me last year and in the year I hit my FRA! they took my WHOLE January check to make up for going over by like $900 the year before. but after that they put it back to normal. and then when I hit my FRA my check went up a littlebit too

I think there's some confusion in the responses. For earnings over the limit, SSA withholds $1 in benefits for every $2 you earn above the limit BEFORE your FRA year. In the year you reach FRA, they withhold $1 for every $3 you earn over a higher limit, and only count earnings BEFORE the month you reach FRA. For your 2025 excess ($1,240 over limit), they'll withhold about $620 from your benefits in early 2026. For 2026, you'll have a much higher limit (around $60,000 annualized) for January through June, and no limit at all starting in July when you reach FRA. This is all explained in SSA Publication No. 05-10069.

I just went through this exact same thing this year! Reached my FRA in May. What I learned: the earnings limit is much higher in your FRA year - I think it was around $56,520 for 2025 (for the months before FRA), and they only count what you earn before your FRA month. For your current situation, going over by $1,240 means they'll probably withhold about $620 (half of the overage) from future checks. They usually send a letter in advance telling you which month(s) will be affected. I was so frustrated trying to get someone at SS to clearly explain this to me. I spent HOURS on hold, getting disconnected, and then having to start all over. I finally tried this service called Claimyr that got me through to an actual SSA agent in under 15 minutes. You might want to check it out at claimyr.com - they have a video demo at https://youtu.be/Z-BRbJw3puU showing how it works. Honestly saved me so much frustration.

My husband and I both had this issue when we were collecting early SS. Honestly the whole earnings limit thing is so confusing and the penalty seems unfair. We both work part time at the same company and I always tell our manager not to schedule us for any extra December shifts because it's not worth dealing with SS taking our benefits away!! The rules do change in your FRA year though. Good news is once you hit FRA in July you can work as much as you want! We're both past FRA now and it's such a relief not having to worry about this anymore.

To clarify what happens with your 2025 excess: SSA will notify you (probably by mail) about the overage and how much they'll withhold. The withholding usually happens from January onwards until the penalty is satisfied. For 2026, here's what you need to know: 1. The earnings limit for months BEFORE you reach FRA will be higher (probably ~$60,000 annually, or $5,000/month) 2. They ONLY count earnings in January-June (the months before your FRA) 3. If you do exceed that higher limit, the reduction rate is more favorable: $1 reduction for every $3 over (not $1 for $2 like now) 4. Starting in July when you reach FRA, no earnings limits apply ever again 5. At your FRA, they'll recalculate your benefit to give credit for any months your benefits were reduced If you need to discuss specific details about your situation, I recommend calling SSA directly.

The good news is that any benefits they withhold now aren't permanently lost. Once you reach FRA, your monthly benefit gets permanently increased to account for the months they withheld benefits. So even though it's painful to lose some checks now, you'll eventually get that money back through higher monthly payments after FRA.

A little off topic but I'm just curious - if you're working part time at a hardware store, are you making enough that it's worth having your SS reduced? I mean, they take $1 for every $2 you earn over the limit, so that's like a 50% tax rate on top of regular taxes! My brother-in-law just decided to fully retire instead of dealing with all this SS reduction nonsense until he hit FRA.

I HATE how they penalize seniors for working!!! It's OUR MONEY that we paid into the system!!! The government just keeps changing the rules whenever they want to STEAL OUR MONEY!!! My cousin lost THREE MONTHS of checks because her employer gave everyone a surprise holiday bonus that pushed her over the limit! SHE HAD NO CONTROL OVER THAT!!! The whole system is DESIGNED to confuse us!!!

I'm in a similar situation and just wanted to add something that might help with planning. When they withhold benefits for excess earnings, they typically send you a notice about 60 days before they start withholding. This gives you some time to prepare financially. Also, one thing I learned the hard way - if you think you might go over the limit, you can actually request voluntary withholding from your benefits throughout the year instead of having them take larger chunks later. You can call SSA and ask them to temporarily stop your benefits if you know you're going to exceed the limit. Some people find this easier to manage than having surprise reductions. For your FRA year (2026), just remember that they'll use a monthly test too. So even if your total January-June earnings are under the annual limit, if you earn too much in any single month before FRA, they might still withhold benefits for that specific month. The monthly limit is usually 1/12th of the annual limit.

I went through something very similar when I was approaching my FRA a few years ago. The confusion around earnings limits is so common - you're definitely not alone in trying to figure this out! One thing that helped me was keeping detailed records of my monthly earnings throughout the year. Since you mentioned you work at a hardware store, those seasonal fluctuations during holidays can really catch you off guard. What I started doing was tracking my year-to-date earnings every few months and calculating how much "room" I had left before hitting the limit. For your 2026 FRA year, the higher earnings limit for those pre-FRA months is a huge relief. Just make sure you understand that they use both an annual test AND a monthly test. So even if your total January-June earnings are under the annual limit, if you have one really high-earning month (like December bonuses or holiday overtime), that could still trigger withholdings for that specific month. The good news is that after July 2026 when you hit FRA, all of this stress goes away forever! You can work as much as you want without any penalties. And like others mentioned, any benefits they withhold now will eventually come back to you in higher monthly payments after FRA. It's not lost money - just delayed. Good luck with everything, and definitely call SSA if you need specifics about your situation!

I've been through this exact situation and wanted to share what worked for me. When I was approaching my FRA, I created a simple spreadsheet to track my monthly earnings and calculate my remaining "allowance" under the limit. This helped me avoid surprises like the one you're experiencing now. For your immediate concern about going over by $1,240 in 2025, they'll likely withhold around $620 from your early 2026 benefits (they take $1 for every $2 over the limit). You should receive a notice about 60 days before they start withholding, which gives you time to budget for it. For 2026 when you reach FRA in July, here's what to expect: You'll have a much higher earnings limit (around $59,520 for 2026) that only applies to January-June earnings. The withholding rate is also better - only $1 for every $3 you earn over that higher limit. Once you hit FRA in July, you can earn unlimited amounts without any reductions. One tip that saved me stress: if you know you'll be close to the limit again, you can actually call SSA and request voluntary benefit suspension for specific months rather than having them surprise you with withholdings later. It gives you more control over your cash flow. The most important thing to remember is that this isn't "lost" money - any benefits they withhold get factored into a higher monthly payment once you reach FRA. Hang in there, you're almost to the finish line where these earnings limits become a thing of the past!

I'm dealing with a very similar situation right now! I'm 64 and have been collecting early benefits for about 18 months. I work part-time at a grocery store and this year I also went over the earnings limit because of unexpected overtime during our busy back-to-school season. What I learned from calling SSA (after being on hold for over 2 hours!) is that they'll send you a letter explaining exactly how much they'll withhold and when. For me, they ended up taking about half of my January and February checks to cover the overage. It was tough financially, but I managed by cutting back on some expenses those months. The part about your FRA year that gives me hope is that the earnings limit essentially goes away once you hit that milestone in July. I've been counting down the months until I reach my FRA because dealing with these earnings calculations every year is honestly exhausting. One thing my neighbor suggested was asking your employer if they can give you a heads up about potential overtime or holiday bonuses earlier in the year, so you can plan better. Some managers are willing to work with you on scheduling if you explain the Social Security situation. Hang in there - you're so close to not having to worry about this anymore! The freedom to work without penalties after FRA will be such a relief.

I'm in a very similar situation and can really relate to your frustration! I'm 63 and have been collecting early benefits for about a year now. I work part-time at a local library, and like you, I got caught off guard by some extra hours during our summer reading program that pushed me over the limit. One thing that really helped me was setting up a simple tracking system on my phone to monitor my year-to-date earnings every month. I wish I had done this from the beginning! Now I check my paystubs against the annual limit regularly so I don't get any more surprises. For your FRA year situation, I've been researching this extensively since I'll be in the same boat in 2027. From what I understand, you'll get that higher earnings limit (around $60K) for just the months before you hit FRA in July, and then complete freedom after that. The $1 for $3 reduction rate instead of $1 for $2 also makes those pre-FRA months much more manageable if you do go over. I know it's stressful dealing with the benefit reductions, but try to remember that this is temporary. Once we hit FRA, we never have to worry about earnings limits again! I keep reminding myself of that when I get frustrated with all these calculations and rules. Have you considered asking your hardware store if they can give you advance notice about busy periods or potential overtime? I had that conversation with my library supervisor and it's made planning so much easier.

I'm new to this community but wanted to chime in since I just went through something very similar last year. I'm 65 now and reached my FRA in September 2024, but I had the same exact worry about earnings limits in my FRA year. What really helped me was calling SSA in early January to confirm the exact earnings limit for my pre-FRA months. For 2024, it was $59,520 for just the months before I reached FRA (January-August in my case). They were actually pretty helpful once I got through - though it did take forever to get someone on the phone. One thing I wish someone had told me earlier: they have this "monthly earnings test" in addition to the annual test during your FRA year. So even if your total pre-FRA earnings are under the annual limit, if you have one really high month (like those holiday bonuses), they might still withhold benefits for that specific month. The monthly limit is usually around 1/12th of the annual limit. For your current situation going over by $1,240, yes they'll probably take about $620 from your early 2026 checks. But honestly, once you hit FRA in July 2026, the relief of never having to calculate this stuff again is incredible! I can work as much as I want now without any stress about benefit reductions. Hang in there - you're so close to the finish line where all these earnings limit headaches become a thing of the past!

I'm dealing with a very similar situation and your post really resonates with me! I'm 64 and have been on early retirement benefits for about two years. Like you, I work part-time (at a local bookstore) and got caught off guard this year when some unexpected overtime during our holiday rush pushed me over the earnings limit. What I've learned from my research and talking to others here is that your FRA year (2026) will definitely be more manageable. You'll get that higher earnings limit (likely around $59,000-60,000) that only applies to your January-July earnings, and the penalty rate drops from $1-for-$2 to $1-for-$3 if you do go over. Plus once you hit FRA in July, you're completely free from earnings limits forever! For your current $1,240 overage, they'll probably withhold around $620 from your early 2026 benefits, but you should get advance notice. One thing I'm planning to do differently next year is have a conversation with my manager about getting advance notice of busy periods so I can make informed decisions about extra shifts. The tracking spreadsheet idea that others mentioned sounds really smart too. I'm going to start monitoring my earnings monthly instead of just hoping I stay under the annual limit. It's frustrating to navigate these rules, but we're both so close to FRA when all this stress goes away permanently. Hang in there!