Social Security earnings limit - is it monthly or yearly cap for early retirement benefits?

Great question! The earnings test for Social Security works both ways - there's an annual limit AND a monthly limit that applies in different situations.If this is your first year claiming benefits, SSA uses the monthly limit ($1,950 in your example). In this case, you would lose benefits for any month you earn over that amount.For years AFTER your first year on benefits, SSA typically uses the annual limit. So your plan would work fine in your SECOND year of benefits - as long as your total stays under $23,400, it doesn't matter how it's distributed.One important exception: the month you reach your Full Retirement Age (FRA), the earnings limit disappears completely regardless of how much you earn!

Thank you! That makes more sense. So in my case, since I'll be starting benefits in 2025 AND working those first 8 months above the monthly limit, I'd lose benefits for those specific months? Even though my annual total is under the yearly cap?

they look at it monthly for first year then yearly after that. atleast thats how it was for me. just make sure you report your earnings right away so you dont end up with an overpayment letter.

This is absolutely correct. I wish someone had told me this when I started my benefits! I went over the monthly amount several times in my first year and got hit with an overpayment notice for nearly $5,700. Was a nightmare to deal with.

The details on this are a bit more complicated than most realize. SSA applies what they call a

This is incredibly helpful, thank you. I guess I need to reconsider my plans then. Maybe I should just wait until my FRA to claim benefits, but that's still 4 years away. Or perhaps work fewer hours those first 8 months to stay under the monthly limit.

If those first 8 months are your grace year, you'll definitely lose benefits in each month you earn over $1,950. But remember, you don't lose those benefits permanently! SSA will recalculate your benefit amount when you reach FRA and increase your monthly payment to account for the months they withheld.Based on your numbers ($2,800/month for 8 months), you'd be $850 over the limit each month. Since they reduce benefits $1 for every $2 over the limit, you'd lose about $425 in benefits each of those 8 months. Just make sure you're factoring this into your budget planning!

I had NO IDEA they adjust your payment when you reach FRA to account for benefits they withhold early on! My brother lost thousands in benefits because of this rule and no one ever explained that to him. The whole system is deliberately confusing!!

ive been collecting social security since 63 (im 65 now) and i can tell you from experience that the annual is the only thing that matters after your first year. i work seasonally - make all my money in summer months then nothing in winter and i only had problems that first year when i was over the monthly. my brother had same issue.

Thanks for sharing your experience! It sounds like my best option might be to either keep my income under the monthly limit that first year or just delay starting benefits until the following year when I've fully transitioned to part-time work.

Another option worth considering: if you're going to be close to or at your FRA soon, the earnings limit is much higher. For people reaching FRA during 2025, the limit will likely be around $51,960 (based on current COLA projections), and they only deduct $1 for every $3 you earn over the limit.And remember - only earnings before the month you reach FRA count toward this higher limit. The month you hit FRA and beyond, there's no limit at all.

Have you tried calling SSA directly to get a personalized analysis of your situation? I know their phone lines are incredibly frustrating - I spent 3 hours on hold last month only to be disconnected.I recently discovered a service called Claimyr that helps you get through to a live SSA agent without the wait. I was skeptical at first, but it actually worked for me. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU. Their website is claimyr.com if you're interested.Talking directly with an agent about your specific earning pattern might help you make the best decision about when to start benefits.

I've been trying to get through to them for weeks! I'll check out that service - anything to avoid those endless hold times. A personal consultation would definitely help since my situation feels a bit unique. Thanks for the suggestion.

DONT TRUST ANYTHING SSA TELLS YOU OVER THE PHONE!!!! Get everything in writing!!! I had 3 different agents tell me 3 different things about the earnings limit. One said monthly mattered, another said only annual, and the third gave me some complicated explanation about \

I've had similar experiences with getting different answers depending on who I talk to. It's super frustrating. I started asking them to email me confirmations of what they tell me or noting the date/time and the person I spoke with. Has saved me more than once.

To summarize everything for you:1. First year claiming benefits: Monthly limit applies ($1,950)2. Second year onwards: Annual limit applies ($23,400)3. Year you reach FRA: Higher limit applies ($51,960), and only earnings before your FRA month count4. Month you reach FRA and beyond: No limit at allFor your specific plan - working Jan-Aug at $2,800/month in your first year of benefits - you would lose some benefits during those 8 months, but receive full benefits Sep-Dec.Two alternatives to consider:1. Start benefits after you reduce your work hours2. Reduce hours in that first year to stay under the monthly limitAnd remember, any benefits withheld due to excess earnings are effectively returned to you later as an increased monthly benefit once you reach FRA.

Thank you so much for this clear summary! Based on everything here, I think I'm going to delay my benefit start date until after I've fully transitioned to part-time work. That way I can avoid dealing with the monthly limit entirely. Really appreciate everyone's help!