Social Security earnings limit strategy: Collecting SS benefits in January before FRA while working full-time?

This isn't as advantageous as you might think. Yes, you can receive benefits and exceed the earnings limit, but SSA will eventually catch up and demand repayment. They typically withhold future benefits rather than sending you a bill, so you might go several months without any payment once they process your earnings information. The earnings limit withholds $1 in benefits for every $2 you earn above the threshold. With your income, they'd withhold ALL of your benefits for the year, plus some. Also, you won't get interest on any temporary benefit amount you need to repay. A better strategy might be waiting until your Full Retirement Age when the earnings test goes away entirely. Or, if you really want to maximize, wait until 70 for the delayed retirement credits.

I've seen this scenario play out several times in my retirement planning practice. The strategy you're describing isn't recommended for several reasons: 1. At your income level ($110,000), you'd exceed the earnings limit by $87,680. This means SSA would withhold approximately $43,840 in benefits (using the $1 for $2 formula). 2. Your annual SS benefits would be around $29,400 ($2,450 × 12), which is LESS than the amount they'd need to withhold. This creates a complex situation where they may withhold ALL of next year's benefits too. 3. The administrative headache is significant. SSA's processing of earnings reports can be delayed, meaning you might receive benefits for months, then suddenly have them stopped completely for an extended period. 4. There's potential for unexpected tax consequences, as benefits received and later repaid can create tax reporting complications. A more strategic approach would be to either wait until your FRA when the earnings test disappears, or if you need immediate income, consider a formal "loan" rather than this SS maneuver.

They dont send u a bill they just STOP ur payments completely!!! Happened to my brother in law and he went 9 months with ZERO payments bc they were "recovering" the overpayment. Plus if ur still working ur SS is taxed up to 85% anyway. Dont do it!!!!!

I know someone who tried this! My cousin did something similar last year. Started benefits at 63 while working full-time as a consultant. SSA caught up to him about 8 months later when his earnings were reported. They stopped his payments completely for almost a year to recoup the overpayment. He said it wasn't worth the hassle and now wishes he'd just waited until his Full Retirement Age to claim.

i think you're mistaking this for the voluntary suspension strategy which is completely different. that one lets you file at FRA and then suspend to earn delayed credits. what you're talking about is just setting yourself up for an overpayment situation which will be a huge hassle. you know what you could do instead? if you want to start now, you could either reduce your work hours to stay under the limit or look into a different work arrangement where you defer some income until after you reach FRA. talked to a planner about this last year for my own situation.

I work in financial planning and see this question occasionally. The real problem is that SSA doesn't process these overpayments in a timely manner. I've seen cases where they don't catch the excess earnings for 12-24 months, then suddenly demand repayment of $30K+ all at once. When that happens, good luck getting someone on the phone for a payment plan! If you need to speak with SSA about any complex situation like this, I recommend using Claimyr.com to get through to an agent quickly. I've directed several clients there who were dealing with repayment issues. You can see how it works in their demo video: https://youtu.be/Z-BRbJw3puU But honestly, with your income level, the optimal strategy is clearly to wait until at least your FRA to file for benefits.

wait can someone explain the earnings limit again? if i make like $30,000 a year and im taking SS early at 63, do i have to pay some back?? i thought it was just that ur benefit is permanently reduced by filing early??

I tried calling SSA to ask about something similar and couldn't get through after 3 DAYS of trying!!! Their phone system is USELESS!!! Kept saying "high call volume" and disconnecting me. WHAT A JOKE! If you're really considering this strategy you NEED to talk to an actual SSA rep to understand all the implications, not just random internet strangers!

has anyone done the math on this? like actually calculated if you come out ahead? I mean, if you take $2,450 x 12 = $29,400 for the year then have to pay back based on the formula ($110,000 - $22,320) / 2 = $43,840 you'd owe more than you received? am i missing something?