Social Security earnings limit prorated for mid-year retirement? Earned over annual limit before retiring at 65

Yes, there is a special rule for the first year of retirement! In the first year you claim benefits, SSA will use a monthly earnings test rather than the annual limit. For months AFTER you claim (so July-December in your case), you can earn up to $1,860/month ($22,320 ÷ 12) without affecting your benefits. What you earned January-June doesn't matter since you weren't receiving benefits yet. Just be careful to stay under that monthly amount for any work you do for the rest of the year.

This is confusing AF! I thought the rule was just the total for the year no matter when you started. My brother got hit with penalties because no one told him about any monthly rule when he started. The SSA makes everything so complicated on purpose I swear!!!

The others are correct about the first-year rule, but I want to add an important detail: You need to be careful about being truly "retired" from your previous job. If you go back to the same employer, even part-time, SSA might question whether you genuinely retired or just reduced hours. Make sure your employer documents the termination of your full-time position and the creation of a new part-time role. Also, keep all your pay stubs organized by month (not just year) since you'll need to prove your monthly earnings if SSA reviews your case.

just fyi the monthly limit switches back to the annual limit next january. so for 2026 you'll need to stay under whatever the annual limit is for the whole year (probably around $23,000) until you reach your full retirement age. keep that in mind if youre making plans

I went through exactly this situation last year. Trying to call the SSA to confirm this rule was IMPOSSIBLE - waited on hold for 4+ hours multiple times and kept getting disconnected. I finally used a service called Claimyr (claimyr.com) that got me connected to an SSA agent in less than 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. The agent confirmed the monthly limit applies in your first year after retirement, and what you earned before claiming benefits doesn't count against you. Saved me so much stress because I was about to turn down part-time work I actually wanted to do!

just be careful!!! sometimes they say one thing on the phone and then do another thing when they process your earnings. my neighbor got hit with a huge overpayment notice even though she swears she stayed under the limit every month. get EVERYTHING in writing!!!!

One more important tip: for the monthly earnings test, SSA counts income when it's earned, not when it's paid. So if you work in December but don't get paid until January, that still counts for December's monthly limit. This trips up a lot of people, especially with holiday bonuses or delayed paychecks.

To summarize for the original poster: 1) Yes, there's a special first-year rule with monthly limits. 2) For July-December 2025, you can earn up to $1,860/month. 3) Your pre-retirement earnings don't count against you. 4) Document your retirement and new position clearly. 5) Keep detailed monthly income records. 6) Beginning January 2026, you'll be subject to the annual limit again until you reach Full Retirement Age. Does that help clarify things?