Social Security earnings limit penalty took entire amount instead of half - what happened?

The $1 for $2 rule is still in effect, but what you're missing is HOW they withhold it. Social Security doesn't take a little bit from each month - they withhold FULL MONTHS of benefits until they've covered the penalty amount. They always round up to the next full month too, which is why you lost two months instead of getting a partial month withheld. It's frustrating, but that's their process.

same thing happend to me last year!!! went over by like $1800 and they took TWO WHOLE MONTHS of my checks. noone warned me about this!!

The confusion here is understandable. Let me clarify how the earnings test penalty works in practice: 1. The rule is indeed $1 withheld for every $2 over the limit 2. Your $2,538 over would calculate to approximately $1,269 in penalties 3. However, SSA always withholds full month payments, not partial months 4. They take your monthly benefit amount and withhold enough whole months to cover the penalty 5. If your monthly benefit is around $1,274, they would need to withhold 2 full months to cover the $1,269 penalty This is one of the most misunderstood aspects of Social Security's earnings limit. The calculation is correct, but the implementation (taking full months) surprises many beneficiaries. Once you reach your Full Retirement Age, these earnings limits no longer apply.

i had this exact problem too and spent WEEKS trying to get someone on the phone at social security to explain it. kept getting disconnected or waiting for hours. this system is broken!

You're all missing something important... did you get a notice from SSA BEFORE they withheld your benefits? They're supposed to send you a letter explaining how much you're over and how many months they're going to withhold. If you didn't get that, you should file a complaint!

Social Security's earnings limit can be confusing, but here's a tip for future reference: You can actually request an adjustment to the withholding if it would cause you financial hardship. You'd need to contact SSA directly and request partial withholding instead of full months, explaining your financial situation. It's not guaranteed they'll approve it, but it's an option many people don't know about. They can spread the recovery over a longer period instead of taking full months at once. Also, remember that in the year you reach Full Retirement Age (FRA), the earnings limit is much higher and the penalty is less ($1 for every $3 over instead of $1 for $2). And once you hit your FRA month, there's no limit at all.

can someone remind me what the 2025 earnings limit is for early retirees? i can never keep track of these numbers and dont wanna get caught again

I went through this exact situation last year and learned that planning ahead is crucial. What I do now is carefully track my earnings throughout the year and adjust my work schedule in the last quarter if I'm getting close to the limit. It's annoying, but it prevents surprises. I also discovered that certain types of income don't count toward the earnings test - like investment income, pension payments, annuities, and capital gains. Only wages and self-employment income count. This helped me reorganize some of my income sources to avoid going over the limit.

does anyone know if they give back this money they take? or is it just gone forever?