Social Security earnings limit when starting before FRA - annual or 12-month period?

The earnings test is applied on a calendar year basis (January through December). If you start benefits in May 2025, they would consider your total earnings for the entire 2025 calendar year, though they do have special rules for the first year you retire.In the first year, they can apply a monthly earnings test rather than the annual one, which helps people who retire mid-year. So if you start benefits in May 2025, they'll only count your earnings from May-December against the limit, dividing the annual limit by 12 and then multiplying by the number of months you're receiving benefits (8 months in your example).After that first year, it's strictly January-December for the annual earnings test period.

That makes so much more sense! So for the rest of 2025 after I start claiming in May, I'd essentially have 8/12 of the annual limit to work with ($21,240 ÷ 12 × 8 = $14,160). And then in 2026 I'd be subject to the full annual limit for that year. Thank you for explaining this - I was worried I'd have to track a rolling 12-month period, which seemed complicated.

it doesnt work like that!!! its ALWAYS per calendar year jan-dec. doesnt matter when u start ss. my brother had to pay back almost 4000 last year cuz he didnt know this. they look at ur WHOLE years income even months b4 u file!!

That's not entirely accurate. While the earnings test is generally applied on a calendar year basis, the SSA does have special rules for the first year you claim benefits. They allow a

I went through this last year! The SSA rep told me that for the first year you retire, they look at your monthly earnings after you start benefits. So it's not the whole calendar year if you have what they call a \

That's reassuring to hear someone else had this experience. Did you have to specifically request they use the monthly method, or did they automatically apply it? I'm worried about dealing with them correctly when I file.

My sister claimed at 63 and she said they definitely went by the calendar year, January through December. They made her pay back some benefits the next year when her W-2 showed she went over the limit. The lady at the office told her it always resets January 1st. So I wouldn't count on any monthly calculations if I were you.

Your sister's situation might have been different. The monthly earnings test for the first year only applies if you have a \

Hey guys, I had the WORST time reaching anyone at Social Security when I was dealing with this same earnings limit issue last year. After getting disconnected five times, I tried a service called Claimyr (claimyr.com) that got me connected to an SSA agent in about 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puUThe agent confirmed they use the monthly earnings test for the first year if you have what they call a \

I've heard of Claimyr! A friend recommended it when I was trying to sort out my widow's benefits. Definitely better than waiting on hold for hours. And yes, that's exactly what they told me about the earnings test too.

WRONG INFORMATION EVERYWHERE! The earnings test is more complicated! I work for H&R Block and here's the truth: If you're under FRA for the ENTIRE year, the $21,240 limit applies for the calendar year (Jan-Dec). BUT, in your first year of retirement, the SSA lets you use something called the 'Monthly Earnings Test' where they only count earnings in months AFTER you start benefits AND are actually retired. The monthly limit is $1,770 for 2025 ($21,240 ÷ 12). After that first year, it's back to annual calendar basis. TRUST ME ON THIS!!!!

Thanks for this detailed explanation. So to be clear, for me to qualify for this Monthly Earnings Test in my first year, would I need to earn under $1,770 in each individual month after I claim? Or is it still a cumulative amount for the remaining months of that year?

To answer your follow-up question: For the Monthly Earnings Test to apply in your first year, you need to earn under $1,770 in EACH month you want to receive full benefits. If you earn over that monthly amount in any month, you won't receive benefits for that specific month. It's evaluated month by month, not cumulatively. For example, if you earn $1,500 in June but $2,000 in July, you'd get your full June benefit but might lose your July benefit.

I really appreciate this clarification! That's actually better than I thought since it means I could have a higher-paying project one month and just lose benefits for that month rather than having it affect my whole year. This helps tremendously with my planning.

I'm getting ready to claim my benefits in a few months and worried about the same thing! I called the SS office last week and was on hold for HOURS and finally gave up :( Does anyone know if they send you a warning before they make you pay money back if you go over the limit? Or do they just automatically deduct it from future payments? I'm so stressed about this.

They typically don't send warnings in advance, but they will notify you if they determine you've been overpaid. If you realize you're going to exceed the limit, it's best to proactively report this to SSA so they can adjust your benefits accordingly. They can either withhold future payments or set up a repayment plan if the overpayment is large. Try to estimate your annual earnings in advance and update SSA if your situation changes.

My brother just went thru this. He started SS at 62 last year but kept working. They don't track it by the month u start. Its always Jan-Dec. And they don't check ur earnings until after tax season when they get ur W2 info. Then they send u a letter saying u owe them money if u went over. It's all so confusing and the website is useless!

Your brother's situation sounds like he didn't qualify for the monthly earnings test in his first year. To qualify for monthly tracking, you need to have what SSA calls a \

As someone who just went through this process myself, I can confirm that the Monthly Earnings Test is real and does apply in your first year of claiming benefits! I started my SS benefits in June 2024 at age 63, and SSA automatically applied the monthly test for the remainder of that year. Each month from June through December, they looked at whether I earned more than $1,730 (the 2024 monthly limit) in that specific month. I had a couple months where I went over due to consulting work, and I simply didn't receive benefits for those specific months - no penalty or payback required. Starting in 2025, I'm now subject to the regular annual calendar year test. The key is making sure you truly have what they call a "grace year" - meaning you've had a substantial reduction in work activity. I'd recommend calling SSA directly to confirm your situation qualifies, but don't let the conflicting information here discourage you from looking into it!

I'm in a similar situation and went through this exact confusion last year! The key thing to understand is that SSA has two different earnings tests: the regular annual test (calendar year Jan-Dec) and the Monthly Earnings Test for your first year. Most people don't know about the monthly option, which is why you're getting conflicting information here. When you start benefits mid-year, SSA will automatically evaluate whether you qualify for the Monthly Earnings Test based on whether you've had a substantial reduction in work activity (what they call a "grace year"). If you qualify, they'll only look at your earnings in each month AFTER you start benefits, using the monthly limit ($1,770 for 2025). This is much more favorable than the annual test if you're retiring mid-year. I'd strongly recommend calling SSA directly to confirm your situation - despite the long wait times, it's worth getting the official answer since this can save you thousands in potential overpayments. Good luck with your planning!

I've been following this discussion with great interest as I'm approaching a similar decision myself. What strikes me is how much confusion exists around what should be straightforward government policy! It's clear that both the annual earnings test and the Monthly Earnings Test exist, but the key seems to be understanding when each applies. For those dealing with SSA directly, I'd recommend asking specifically about the "grace year" provision and Monthly Earnings Test when you call - don't just ask about general earnings limits. Also, if you're having trouble getting through to SSA, document everything and consider getting any verbal confirmations in writing through their online portal or by requesting written correspondence. The stakes are too high for miscommunication when it comes to potential overpayments. Andre, given that you're planning to start in May with reduced consulting work, it really does sound like you'd be a good candidate for the monthly approach, but definitely get official confirmation from SSA before making any major financial decisions based on it.

As a newcomer to this community, I have to say this entire discussion has been incredibly enlightening! I'm about 18 months away from my own early retirement decision and had no idea about the Monthly Earnings Test for the first year - this is exactly the kind of real-world information you can't easily find on the SSA website. What really stands out to me is how many different experiences people have had, which seems to depend on whether they qualified for that "grace year" provision or not. For anyone else following along who might be in a similar situation, it seems like the key takeaways are: 1) There ARE two different earnings tests, 2) The monthly test can be much more favorable if you qualify, 3) You need to specifically ask SSA about the "grace year" provision by name, and 4) Get everything documented in writing. Andre, I hope you get the clarity you need when you call SSA directly - please consider updating us on what you learn, as I'm sure others will benefit from your experience! This community is such a valuable resource for navigating these complex decisions.

As someone who recently navigated this exact situation, I can add some clarity here! I claimed my Social Security benefits at age 64 in March 2024 while still working part-time, and I was initially just as confused as you are about the earnings test timing. Here's what I learned from my SSA representative: If you're claiming benefits for the first time and have significantly reduced your work activity (what SSA calls a "grace year"), you'll likely qualify for the Monthly Earnings Test for the remainder of your first year. This means from May through December 2025, you'd be evaluated month-by-month using the $1,770 monthly limit rather than being subject to the full annual limit. The key is that "substantial reduction in work activity" requirement - since you mentioned you're reducing from full-time to part-time consulting, you should qualify. Each month after you start benefits, if you earn under $1,770, you get your full benefit for that month. If you earn over $1,770 in a specific month, you simply don't receive benefits for just that month - no penalties or payback issues. Starting in 2026, you'd then be subject to the standard calendar year earnings test (January-December). I'd definitely recommend calling SSA and specifically asking about the "Monthly Earnings Test" and "grace year provision" - use those exact terms. The regular customer service reps are more familiar with these concepts when you use the official terminology. This monthly approach was a game-changer for my planning since I could take on higher-paying projects occasionally without worrying about exceeding an annual limit. Hope this helps with your budgeting!