Social Security earnings limit working as consultant after FRA - Can I earn $3k monthly in 2025?
I'll hit my full retirement age (FRA) in August 2025 and plan to start collecting Social Security then. According to my latest statement, my monthly benefit should be around $3,720. I'm switching to part-time consulting after decades in corporate management, but I'm confused about the earnings test. If I work January through July (before reaching FRA) and earn about $4,200 monthly from consulting, will I exceed some limit? And once I reach FRA in August, can I earn unlimited income for the rest of 2025 without affecting my SS benefits? The SSA website keeps mentioning different limits for 'the year you reach FRA' versus 'before the year you reach FRA' and I'm completely lost trying to figure out which rules apply to my situation. Any help understanding these earnings limits would be greatly appreciated!
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Margot Quinn
Good timing on your question! For 2025, the earnings limit for the months BEFORE you reach full retirement age is $22,320 per year (or $1,860 monthly). Since you'll work January-July (7 months) at $4,200/month, that's approximately $29,400 - which exceeds the limit by about $7,080. In the year you reach FRA, SSA typically withholds $1 in benefits for every $3 you earn above the limit. But the key point: they only count earnings BEFORE the month you reach FRA. Once you hit your FRA month (August), you can earn unlimited income with no reduction in benefits.
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Raúl Mora
•Thanks for explaining. So if I understand correctly, they'll withhold some of my benefits when I start collecting in August because I exceeded the limit earlier in the year? Would it be about $2,360 in withholdings (that's $7,080 ÷ 3)? Or do they calculate it differently?
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Evelyn Kim
Wait I'm confused...doesn't the earnings limit only matter if you're actually RECEIVING Social Security? If you're not taking benefits until August (your FRA month), then the earnings Jan-July don't count against any limit because you weren't collecting benefits then anyways. Am I missing something here??
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Margot Quinn
•You're absolutely right - I misread the original post. If you're waiting until August (your FRA month) to START collecting benefits, then your January-July earnings won't affect your benefits at all. The earnings test only applies when you're receiving benefits. And once you reach FRA, there's no earnings limit regardless.
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Diego Fisher
My brother went through this exact thing last year! The SSA website is SO CONFUSING on this topic. He ended up calling them like 5 times and got different answers each time!!! 😡
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Raúl Mora
•That's exactly what I'm worried about - getting inconsistent information. Did your brother finally get a clear answer? Did he end up having any unexpected reductions?
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Henrietta Beasley
i hit my FRA last year and let me tell you its a huge relief not worrying about earnings limits anymore! i was stressing about it for years before that, always checking my paystubs against the limit. such a headache. august will come before you know it then earn all you want
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Lincoln Ramiro
When I was dealing with the earnings limit confusion last year, I found it impossible to reach anyone at Social Security. After 30+ attempts and hours wasted, I discovered a service called Claimyr (claimyr.com) that got me connected to an SSA agent in under 20 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU If you're uncertain about your specific situation, getting official clarification from SSA directly is your best bet. The earnings test rules have so many specific exceptions and details that online advice can't cover everything.
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Raúl Mora
•Thanks for the tip! I'll check it out. You're right that getting the official word from SSA would give me peace of mind, especially since my consulting income might fluctuate month to month.
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Faith Kingston
My neighbor just went through this same issue and it turns out there's another thing to consider - they look at when you EARN the money not when you get paid! So if you do consulting work in July but don't invoice until August, it still counts for July (pre-FRA). The SSA rep told her its all about when you performed the service not when payment hits your account.
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Emma Johnson
•This is an important point about Social Security earnings test rules. For self-employed people (like consultants), SSA generally counts income when you perform the service, not when you receive payment. However, there are exceptions for certain types of ongoing businesses. For a more detailed explanation, see SSA's Program Operations Manual System (POMS) section RS 02505.015 which covers how they determine when income is "earned" for self-employed individuals under the earnings test.
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Diego Fisher
BUT ALSO be careful about the TAX implications!!! Even though there's no earnings limit after FRA, if your combined income (SS benefits + other income + tax-exempt interest) exceeds certain thresholds, up to 85% of your SS benefits could become taxable. Something else to plan for!
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Evelyn Kim
I'm still confused about one thing - does the annual earnings limit ($22,320 for 2025) get prorated if you're only subject to the limit for part of the year? Like if OP starts benefits in August, does the limit for Jan-July become 7/12 of the annual amount?
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Margot Quinn
•Great question! The annual limit doesn't get prorated based on when you start benefits. However, there's a special rule for the first year you claim benefits called the "monthly earnings test." If you start benefits mid-year and haven't exceeded the annual limit before your start date, SSA can apply a monthly limit ($1,860 in 2025) for the remaining months. This wouldn't apply to the original poster if they're waiting until their FRA month to start benefits, since there's no limit once they reach FRA.
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Emma Johnson
To simplify what's been said and clarify a key point: if you wait until August 2025 (your FRA month) to START collecting Social Security benefits, then: 1. Your January-July 2025 earnings won't affect your benefits at all, regardless of amount 2. From August onward, you can earn unlimited income with no benefit reduction The earnings test only applies when you're actually receiving benefits before FRA. Since you're planning to start benefits exactly at your FRA month, the earnings test essentially doesn't apply to your situation at all. This is one of the advantages of waiting until exactly your FRA month to start benefits.
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Raúl Mora
•Thank you for this clear explanation! That's a huge relief. I was getting lost in all the different scenarios and limits. So essentially, by waiting until my FRA month to start benefits, I avoid all the earnings test complications completely.
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