Social Security earnings test confusion - do March wages paid in April count for which month?
I'm planning to retire later this year (I'm 63) and start collecting Social Security. I'm still working part-time and need to stay under the earnings limit since I'm below FRA. My payroll schedule is creating confusion - I'll be earning wages in one month but getting paid in the next. For example, work I do in March doesn't hit my bank account until April 2nd or 3rd when payroll processes everything. Does SSA count those earnings for March (when I actually did the work) or April (when I received the payment)? I'm trying to carefully plan my income to maximize my benefits without triggering any reduction. My employer uses the 1st-30th/31st for pay periods if that matters. Sorry if this is a basic question, but I'm overthinking everything as my retirement date approaches!
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Zainab Yusuf
For the Social Security earnings test, what matters is when the money was EARNED, not when it was paid. So work you perform in March counts toward March's earnings limit, even if the actual payment hits your bank account in April. This is different from how SS treats income for tax purposes (where it's the year you receive the money). For the earnings test, it's about when you performed the work. Make sure you keep good records of exactly when you earned specific amounts in case SSA ever questions it. Your pay stubs should show the pay period dates which is what they'd look at.
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Miguel Alvarez
•Thank you!! That makes sense - I was getting mixed up with the tax rules. So basically I should be tracking by pay period dates on my stubs, not deposit dates. That helps a lot with my planning!
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Connor O'Reilly
i thought it was when you get paid not when u earn it??? thats how my cousin's retirement worked last yr. SS counted the month he got the $$ not when he worked. but maybe rules r different for everyone idk
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Zainab Yusuf
•Your cousin may have been confused. SSA consistently applies the earnings test based on when the work was performed, not when it was paid. This is clearly stated in their program operations manual. Sometimes people mix this up with income tax rules, which do focus on when money is received.
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Yara Khoury
The SSA follows what's called the "wage earner test" which means they assign earnings to the month in which you PERFORMED the work, not when you received payment. So your March work counts for March even if paid in April. However, there's a bit more to consider with the annual earnings test. For 2025, if you're under FRA for the full year, you can earn up to $22,875 before they start reducing benefits (they reduce $1 in benefits for every $2 you earn above the limit). If you'll reach FRA during 2025, you get a higher limit of $60,900 for the months before reaching FRA, and they only reduce $1 for every $3 over the limit. Are you tracking your projected annual earnings as well as monthly?
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Miguel Alvarez
•I've been tracking annual - I should stay under about $20,000 for the year since I'm planning to stop working completely by September. So I should be under the annual limit, but I was worried about which month certain earnings would count toward. This helps clarify things!
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Keisha Taylor
Not a dumb question at all! When I retired in 2023, I had the EXACT same confusion. Everyone told me different things including the person at my local SS office (who was wrong btw).
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Miguel Alvarez
•Thanks for saying that - it's reassuring to know I'm not the only one who found this confusing! Did you end up having any issues with your benefits because of the earnings test?
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Keisha Taylor
•I had a small overpayment I had to pay back because my earnings were slightly higher than I estimated. My advice: document EVERYTHING and keep all pay stubs organized by month of when the work was performed, not paid.
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StardustSeeker
I went through this exact headache last year!!! Spent 3 DAYS trying to reach someone at Social Security to get a clear answer. Every time I called, I'd wait for 2+ hours and then get disconnected. So frustrating!!! I finally used a service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in under 20 minutes. The agent confirmed it's when you EARN the money, not when it's paid. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU Saved me so much stress and I got official confirmation. The agent even noted it in my file in case there were questions later.
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Miguel Alvarez
•That's exactly what I was afraid of - spending hours trying to get through to SSA. I'll check out that service if I need to confirm anything else. I'm glad to hear the answer aligns with what others are saying here about counting when earned, not paid.
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Paolo Marino
When I was in your situation I just stopped working the month before I filed for SS benefits to avoid the whole issue. Made it much cleaner paperwork-wise. Might be something to consider?
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Miguel Alvarez
•That's a good point. I was considering working part-time for a few months after starting benefits, but maybe I should just make a clean break to avoid complications. I'll run the numbers both ways.
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Amina Bah
Sorry to hijack but I have a related question - what about annual bonuses? I get a yearly bonus in March for the previous year's work. Does that count toward March's earnings test or is it attributed to the previous year since that's when I technically earned it?? The SSA website is totally unclear about this!
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Yara Khoury
•Great question. Bonuses are typically counted in the month they're paid, not earned - unlike regular wages. So your March bonus would count toward March's earnings test, not the previous year. This is because bonuses are considered "special payments" under SSA rules. If the bonus pushes you over the earnings limit for that month, you should contact SSA for a special wage verification.
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Connor O'Reilly
This is y i just waited till my FRA to claim... too many rules and they take ur $$ back if u mess up!
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Miguel Alvarez
•I've definitely considered waiting until FRA to avoid all this, but financially I need to start benefits sooner. Trying to navigate the rules as carefully as possible!
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Zainab Yusuf
One more important thing to know: if you earn over the limit and have benefits withheld, SSA will recalculate your benefit amount when you reach FRA to give you credit for the months they withheld benefits. So you're not permanently losing that money - it will increase your monthly benefit amount starting at FRA. Also, the earnings test only applies to earned income (wages, self-employment). It doesn't apply to investment income, pension payments, or other unearned income.
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Miguel Alvarez
•I didn't realize they recalculated at FRA - that's good to know! And yes, I only have to worry about my part-time job income; my small pension and dividends won't affect the earnings test. Thanks for the additional information.
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