Social Security earnings limit confusion - will $23,400 limit apply if I start benefits mid-2025?

Yes, the earnings limit applies, but it's prorated for the first year you receive benefits. So if you start receiving benefits in May 2025, you'd be subject to the limit for 8 months (May-December). The annual limit of $23,400 would be prorated to $15,600 for those 8 months ($23,400 ÷ 12 × 8). SSA counts earnings when they're earned, not when they're paid. So December work paid in January counts for December's earnings.

my sister went thru this last yr. they take $1 away from ur benefits for every $2 u make over the limit. its a NIGHTMARE to deal with!!! they made her pay back money later cause she didnt report right.

I can provide some clarity on this. The annual earnings limit for those under FRA in 2025 is $23,400, and SSA withholds $1 in benefits for every $2 earned above that limit. In your specific situation, here's how it works: 1. SSA applies what's called a "monthly earnings test" during your first year of retirement. This is actually beneficial. 2. During that first year only, you're allowed to receive full benefits for any month you earn under the monthly limit ($1,950) regardless of your annual earnings. 3. So even if you've earned $30,000 before starting benefits in May, as long as you earn under $1,950 each month for the rest of the year, you'd receive full benefits for those months. 4. After your first calendar year on benefits, only the annual test applies. Important: If you're going to earn consistently above the monthly limit, then waiting until closer to your FRA might make financial sense.

I went through EXACTLY this last year and what a headache!!! Called SSA like 20 times and got different answers every time!! Finally got someone who explained it clearly. The $1 for $2 reduction isn't taken evenly - they withhold ENTIRE CHECKS until they've withheld enough to cover the excess earnings. So you might not get ANY payments for several months depending on how much you're over!! I tried using the SSA calculator online but it was so confusing. The worst part was trying to reach someone at SSA. I'd wait on hold for hours and then get disconnected. BEYOND FRUSTRATING!!!!

My two cents - just wait till FRA. I tried working under the earnings limit and it was a major headache. Had to constantly worry about how much I was making, whether I'd go over, and how it would affect my benefits. When I finally hit my FRA it was such a relief. No more worrying about earnings limits! Freedom!!

One more consideration for your decision - even if you have benefit reductions due to working, those aren't truly "lost." When you reach FRA, Social Security will recalculate your benefit amount to credit you for months when benefits were reduced or withheld due to earnings. So you'll get some of that money back in the form of a higher monthly benefit going forward. That said, many people find it simpler to just wait until FRA if they're going to continue earning above the limit. It means a higher benefit amount and no earnings test to worry about. For others who need the income now, claiming early and dealing with reductions makes more sense. You might want to request a calculation from SSA to see the difference between starting now versus waiting until FRA.

dont 4get about taxes too!! my friends dad had to pay taxes on his SS when he was still working even tho they already took money away from his checks for being over the limit. double whammy!!