Social Security earnings limit - does $1 for $3 rule start YEAR of FRA or actual MONTH of FRA?

The higher earnings limit with the $1 for $3 withholding applies during the months of the calendar year up to the month you reach your Full Retirement Age (FRA), not the entire year. So in your case, from January to May of the year you turn 67, you'll be subject to the more generous annual limit (which is $56,520 for 2025), and SSA will withhold $1 for every $3 you earn above that limit. Once you reach your FRA in June, there's no earnings limit at all. Make sure you understand that the annual limit for the months before FRA ($56,520) is prorated based on how many months you have before reaching FRA. Since you reach FRA in June, you'd have 5 months at the higher limit, so your personal limit would be approximately $23,550 for January-May (5/12 of $56,520). At $3,200/month for 5 months, you'd earn $16,000, which is below your prorated limit, so you wouldn't face any benefit reductions during those months.

the higher limit only applies in the YEAR you hit full retirement age. its not for any earlier years. and yes only until the month of your actual birthday month. after that theres NO limits at all. my sister was so confused by this and ended up waiting an extra 6 months to apply bc she thought she would loose benefits. big mistake!!

Your understanding is correct. Let me clarify with the actual numbers to make it crystal clear: For 2025, there are two different earnings limits: 1. If you're under FRA for the entire year: $22,320 annual limit with $1 withheld for every $2 over the limit 2. In the year you reach FRA: $56,520 annual limit with $1 withheld for every $3 over the limit (but this only counts earnings in the months BEFORE you reach FRA) Since you reach FRA in June 2025, you'd use the second, more generous limit, but only for January through May. And as noted above, it's prorated based on how many months you have before FRA in that year. At your $3,200/month income, you'll be well under the limit, so you should be fine applying earlier in the year without facing deductions.

To the person asking about $4,000/month reaching FRA in December - you'd use the higher limit ($56,520) because you're reaching FRA that year. Since you reach FRA in December, you'd count your earnings from January through November against that limit. So $4,000 × 11 months = $44,000, which is still under the $56,520 limit, meaning you wouldn't have any benefits withheld.

I WISH THEY WOULD EXPLAIN THIS CLEARLY ON THEIR WEBSITE!! I spent HOURS trying to figure this out last year and ended up losing 4 months of benefits because I was scared about the earnings test. The SSA reps on the phone gave me different answers every time I called!!! I finally figured out what you all are saying - the $1 for $3 rule is ONLY for the months in the year you reach FRA, and ONLY for the months before your FRA month. After that, you can earn AS MUCH AS YOU WANT with no penalty. The whole system is designed to be confusing on purpose I swear!!!!

OK so lets say someone reaches FRA in October 2025, but has already earned $60,000 by June. Does that mean they'd have some benefits withheld for July, August, and September? How does SSA even track this? Do they look at your monthly earnings or just the annual total on your W-2? I tried calling SSA three times this month and couldn't get through. The automated system keeps disconnecting me after 30 minutes on hold.

Thanks everyone for these helpful explanations. I think I finally understand the earnings test rules now! One more question - since the earnings limit doesn't apply once I reach my FRA month (June for me), could I potentially earn a huge amount in the second half of the year without any impact on my benefits? Like if I got a big bonus in July or took on extra work after my birthday?

my friend said that they look at your annual earnings from your tax return so if you earn too much during the year they make you pay back benefits, even if you earned the money after your FRA month. is that wrong???

This whole STUPID system with these complicated rules just proves how BROKEN the Social Security Administration is!! Why can't they just make it SIMPLE??? Why should we be PUNISHED for working??? I paid into the system my WHOLE LIFE and now I have to deal with all these ridiculous calculations and limits!!! RIDICULOUS!!!!

I went through this exact situation last year when I turned my FRA. Here's what I learned after multiple calls with SSA: 1. They do count your earnings ONLY until the month before your FRA month 2. If you're over the limit, they'll reduce your benefits throughout the year based on your ESTIMATE of earnings 3. They'll adjust after the fact once they get your actual W-2 4. If they withheld too much, you'll get it back 5. If they didn't withhold enough, you'll need to pay it back My advice: If you're going to be close to the limit, provide SSA with a detailed monthly breakdown of your expected earnings for the year. That way they can apply the earnings test more accurately.