Social Security earnings limit question - Does pension count as income before FRA?
I'm planning to retire at the end of March 2025, about 2 weeks before my 65th birthday in April. My full retirement age is 67, but I want to start collecting SS benefits early. I'm worried about the earnings test though - I'll have about $15,000 in salary for January-March, and then I'll start receiving a monthly pension of around $2,300 from my employer. Does anyone know if this pension counts toward the annual earnings limit for Social Security? I don't want to go over the limit and have my benefits reduced. I've tried calling SSA twice but got disconnected both times after waiting for over an hour! Any insights would really help me finalize my retirement plans.
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NightOwl42
Good news! Your pension doesn't count toward the earnings limit. The earnings test only applies to wages from actual work or self-employment income. Pension payments, investment income, interest, annuities, capital gains and other government benefits don't count toward the limit. So your $15,000 in salary is the only income that counts toward your annual limit. For 2025, if you're under FRA the whole year, the limit should be around $23,000 (it was $21,240 for 2023 and increases annually with COLA), so you should be fine.
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Dylan Hughes
•Thank you so much! That's a huge relief. I was stressing over this for weeks. So just to be 100% sure - even though my pension is from the same employer where I earned the $15k in wages, it still doesn't count toward the earnings limit? That seems almost too good to be true!
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Sofia Rodriguez
My brother started his pension right before FRA and they DID count it!! He had to pay back like $4000 to Social Security. You should definetly check with SSA directly dont trust internet advice
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NightOwl42
•There must have been something else going on with your brother's situation. According to SSA's own rules, pensions do NOT count toward the earnings test. Only wages and self-employment income count. Maybe he had continued working part-time or had some self-employment income? The official SSA website confirms this: https://www.ssa.gov/oact/cola/rtea.html
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Dmitry Ivanov
I went through this exact scenario last year. Your pension is NOT counted toward the earnings test limit - only actual work income counts. However, be careful about something else: if your pension is from work where you didn't pay Social Security taxes (like some government jobs), you might be subject to the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO). These can reduce your Social Security benefits in a different way than the earnings test. Do you know if you paid Social Security taxes on the job that's providing your pension?
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Dylan Hughes
•Yes, I paid Social Security taxes at this job. It's in the private sector (manufacturing company), not government. So I don't think WEP/GPO would apply to me. That's another relief! Thanks for pointing that out though - I hadn't even considered that angle.
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Ava Thompson
Last year when I filed, they wanted to know ALL my income not just work income. So I think maybe pension does count?? The lady at the office told me everything counts toward the limit. So confusing!!!!
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Miguel Herrera
•The SSA asks about all your income for different reasons - some types affect how much of your SS benefits are taxable, and others can affect eligibility for SSI. But for the earnings test specifically (which is what reduces benefits if you're under FRA), only wages and self-employment income count. I think the representative might have been talking about something else or you misunderstood. The earnings test ONLY counts earned income from work.
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Zainab Ali
I went through something similar. Tried calling SSA for 3 weeks straight to confirm all this pension stuff. Could never get through - always disconnected after waiting 1-2 hours. Super frustrating when you're trying to make important retirement decisions!!
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Connor Murphy
•I had the same horrible experience trying to reach them about my disability appeal. After weeks of getting nowhere, I finally tried a service called Claimyr (claimyr.com). They somehow got me through to an actual SSA agent in about 20 minutes instead of hours. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. It was honestly worth it just to finally get my questions answered and move forward with my retirement planning. Might help with your pension questions too.
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Dmitry Ivanov
One more thing to consider - if you're turning 65, make sure you sign up for Medicare during your Initial Enrollment Period (IEP). This starts 3 months before your 65th birthday month and extends 3 months after. Missing this window can result in permanent premium penalties. This is separate from your Social Security retirement benefits decision.
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Dylan Hughes
•Thanks for the reminder! I already started the Medicare enrollment process since my company insurance ends when I retire. I'm actually planning to sign up for Parts A and B starting in April.
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Sofia Rodriguez
Congrats on retiring!! Im hoping to do the same in 2 years but worried about inflation eating up my savings. So hard to plan with everything always changing. Good luck!
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Miguel Herrera
Since you'll be 65 in April 2025, your Full Retirement Age is actually 67 (for people born in 1960 or later). Keep in mind that claiming at 65 means you'll get approximately 86.7% of your full benefit amount. Also remember that the annual earnings limit for 2025 will likely be around $23,000 if you're under FRA the entire year. Since you'll only have $15,000 in wages that count toward this limit, you should be fine even without considering the pension (which, as others have correctly noted, doesn't count toward the earnings test).
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Dylan Hughes
•Yes, I know I'm taking a reduction by claiming early, but I've done the calculations and it makes sense for my situation. Health issues in my family history make me doubt I'll reach the "break-even" age. Thanks for confirming the earnings limit information too!
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