Social Security earnings limit question - how much can I earn at 63 without penalty?
I started collecting Social Security last month at 63 and I'm still working part-time at a local bookstore. I'm confused about how much I can earn without getting my benefits reduced. Is it $21,240 for the whole year of 2025? Or is it calculated monthly ($1,770/month)? My hours vary seasonally - I work more during holiday seasons and less in summer. If I go over the limit one month but stay under for the year, will I still get penalized? Also, does only W-2 income count or would selling stuff on eBay also affect my benefits? I'm trying to be careful so I don't get hit with a surprise reduction!
11 comments
Join the conversation
Connor Gallagher
When you're collecting Social Security before your Full Retirement Age (which is 67 for people born in 1962), you're subject to the earnings test. For 2025, the annual limit is $21,240. If you earn over that, SSA will withhold $1 in benefits for every $2 you earn above the limit. However, there's a special rule for the first year you retire. SSA can use a monthly test instead of the annual test. So if you stay under $1,770 in a month, you'll get your full benefit for that month, regardless of your annual total. This might help with your seasonal work schedule. And yes, only wages and self-employment income count. Selling personal items on eBay isn't usually counted unless you're running it as a business. Investment income, pensions, and other government benefits also don't count toward the earnings limit.
0 coins
AstroAlpha
•do gifts from family count? my son gives me money every month to help out
0 coins
Yara Khoury
DONT TRUST WHAT THEY TELL YOU!! i went over by just $340 last year and they took back WAY more than that!! they took $680 from me!!! exactly like they said...$1 for every $2 over. but its still RIDICULOUS!! the whole system is designed to punish people who work. i say just dont report anything if you can get away with it!!
0 coins
Keisha Taylor
•That's literally how the rule works though... $1 reduction for every $2 you earn over the limit. And the SSA gets income reports directly from the IRS, so "not reporting" isn't really an option unless you want to commit tax fraud.
0 coins
Paolo Longo
I'm 64 and went through this exact same confusion last year! The annual limit is what matters MOST of the time, but as someone mentioned, there's a special first-year rule. The most important thing to know: If you're going to earn more than the annual limit ($21,240), CALL SOCIAL SECURITY AND TELL THEM! If you don't, they'll find out when your W-2s are processed, and you'll get a nasty overpayment notice later. I had to call them about this and was on hold for 3+ hours before getting disconnected. I finally used this service called Claimyr (claimyr.com) that got me through to a representative in about 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU Definitely worth it because once I talked to SSA, they adjusted my benefit amount for the rest of the year instead of hitting me with a huge overpayment bill later.
0 coins
Zainab Ahmed
•Thanks for the tip! I'll definitely check it out. I tried calling SSA twice already and couldn't get through. I'm worried because I might go over the limit during the holidays when I pick up extra shifts. Do they take the money back all at once or spread it out?
0 coins
Amina Bah
Im in basically the same boat as you but im 64. What they don't tell you is that once you hit your full retirement age (67 for us), there is NO LIMIT to what you can earn. The earnings limit only applies before your FRA. I'm counting down the years lol.
0 coins
Oliver Becker
•This is an important point! Once you reach Full Retirement Age, the earnings test goes away completely. For someone age 63 today born in 1962, your FRA is 67. Also worth noting - any benefits withheld due to the earnings test aren't truly "lost." After you reach FRA, your monthly benefit will be recalculated to credit you for the months your benefits were withheld, resulting in a higher monthly payment going forward. The system is designed to be roughly actuarially neutral in the long run. The earnings test is more about the timing of benefits rather than a permanent reduction.
0 coins
AstroAlpha
my frend at work said its monthly but his sister says its yearly so who knows?? social security people tell you something different everytime you call!! good luck!
0 coins
Connor Gallagher
•It is an annual limit, but there's a special monthly rule that can apply in your first year of retirement. It can be a bit confusing, which is why I recommend speaking directly with an SSA representative about your specific situation.
0 coins
Zainab Ahmed
Thanks everyone for the helpful answers! I called Social Security using the Claimyr service that someone recommended, and it really did get me through quickly! The representative explained that since this is my first year on benefits, I can use the monthly test for the rest of 2025. That's perfect because I can limit my hours to stay under $1,770 each month, even during holiday seasons when I usually work more. Then next year I'll need to watch my annual total instead. They also told me that if I do go over, they don't immediately take money back - they adjust future payments. And the part about getting credited back after I reach full retirement age was news to me! Makes the whole system seem more fair. Thanks again for all the advice!
0 coins