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Social Security earnings limit reduction of $5072 - when will SS start deducting from my benefits?

I turned 63 last month and started collecting my Social Security retirement benefits early (I know, I know...but medical bills were piling up). My monthly check is about $1,820. My part-time job will put me about $10,140 over the 2025 earnings limit this year. I calculated that this means my benefits will be reduced by around $5,072 (half of what I'm over). What I can't figure out is WHEN will SSA actually reduce my payments? Will they just stop sending checks for a few months? Reduce each check? Send me a bill at the end of the year? I called the 800 number three times but couldn't get through. My local office has no appointments for 2 months. This is stressing me out because I need to budget for these cuts. Anyone gone through this?

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16 comments

Mei Zhang

•28d

Speaking from experience, once you report your expected earnings, they'll usually reduce your monthly payments throughout the remainder of the year. But sometimes they don't catch it until later and then they'll withhold ENTIRE monthly payments until they've recovered the amount. This happened to me in 2023 - I went over by about $8000 (so $4000 reduction) and they held back TWO entire monthly checks in November and December. No warning! Just suddenly no deposit. It was a nightmare for my finances. I've found a service called Claimyr that can get you through to SSA quickly instead of waiting on hold for hours. I used it to finally talk to someone about this situation - claimyr.com. They have a video showing how it works here: https://youtu.be/Z-BRbJw3puU

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Amara Eze

•28d

The SSA handles earnings limit deductions in one of three ways, depending on when they become aware of your excess earnings: 1. If you report your expected earnings in advance (which you should do), they'll calculate the reduction and spread it evenly across your remaining monthly payments for the year. 2. If they discover it mid-year through employer wage reports, they may withhold several full monthly payments until they recover the amount. 3. If they don't catch it until after the year ends (through tax return matching), they'll send you an overpayment notice and either request repayment or withhold future checks. The form you want is the SSA-795 (Statement of Estimated Earnings). You should contact them immediately to report your expected earnings for the year. This gives you more control over how the reduction is applied. Also, remember that the earnings limit only applies to earned income, not investment income, pensions, or other unearned income.

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Fatima Al-Hashemi

•28d

Yes, your calculations are correct. For 2025, the earnings limit for those under FRA is $22,320. If someone exceeds that by $10,140, the reduction would be $5,070 ($1 for every $2 over). A different rule applies in the year you reach FRA - the limit is higher ($59,520 for 2025) and the reduction is only $1 for every $3 over. And once you reach your Full Retirement Age, there's no earnings limit at all. The reduction isn't permanent though - when you reach FRA, SSA recalculates your benefit to give credit for months when benefits were withheld.

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Amara Eze

•28d

For both you and the original poster, there's an important detail to understand: the earnings limit doesn't apply to all income, only to earned income (wages, self-employment income). And in the year you first retire, SSA often applies a monthly earnings test rather than the annual test. This means if you have some months where you earn over 1/12 of the annual limit ($1,860/month for 2025) and some months under, they might only reduce benefits for the months you exceed the monthly limit. If you've recently reduced your hours or plan to stop working later this year, make sure to tell SSA about your month-by-month earnings, as this could significantly reduce the total amount they withhold.

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Fatima Al-Hashemi

•28d

The MySocialSecurity portal lets you report wages, but for this specific situation (estimating annual earnings that will exceed the limit), it's actually better to speak directly with an SSA representative. They can enter your estimate into their system and explain exactly how they'll adjust your benefits. The online reporting tool is more for reporting actual monthly earnings after the fact, not for prospective estimates that affect the earnings test calculation.

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