Social Security filing strategy at 66.1 - losing money by starting benefits before FRA with earnings limit?
I need to double-check my Social Security calculations before I make a big mistake! I'm 66 years and 1 month now, with my Full Retirement Age (FRA) coming up in June 2025. My husband already started his SS benefits at his FRA last year. I'm trying to decide whether to start my benefits NOW (January 2025) or wait until my actual FRA in June. My own benefit plus the spousal top-up would give me $500 extra per month from my husband's record. I've calculated that starting in January instead of waiting until June would only reduce my monthly benefit by about $52. This makes me think I should just start in January. HERE'S MY CONCERN: I work seasonally from March-December earning about $3,500 monthly (so under $22,000 total before reaching my FRA in June). Will the earnings limit affect me since I'm starting benefits before FRA? Will they withhold some of my benefits? Is my math right that it's better to start in January despite the small reduction? I'm worried I'm missing something important in my calculations!
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Marilyn Dixon
Your calculation about the $52 reduction is roughly correct, but you need to consider the earnings test. Since you're starting benefits before your FRA, the earnings limit for 2025 is approximately $22,320 for the months before you reach FRA. SSA withholds $1 in benefits for every $2 you earn above that limit. Based on your numbers, you'll earn just under the limit before reaching FRA in June, so you shouldn't have any benefits withheld. Once you reach FRA in June, there's no earnings limit, so you can earn as much as you want without affecting your benefits. Starting in January makes sense in your situation since the reduction is small and you won't hit the earnings limit before FRA.
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Dominique Adams
•Thank you! That's a relief to hear. I was so confused about whether the earnings limit would affect me since I'm past 66 but not quite at my FRA. So to confirm - even though I'll be working March-June before reaching FRA, since my total earnings during those months will be under the $22,320 limit, I won't have any benefits withheld? And then after June I can earn whatever without any impact?
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Louisa Ramirez
my sister had same exact problem last yr!!! she started 4 mths before FRA and SSA took back some of her $$ because she made too much at her job. make SURE ur under that limit or they'll take it right back!!! so frustrating!!!!
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Dominique Adams
•Oh no, that's exactly what I'm worried about! Did your sister get her benefits back later? I think I'll be under the limit, but now I'm second-guessing myself about my calculations.
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TommyKapitz
You're on the right track with your calculations. Let me clarify a few things about the earnings test: 1. For 2025, the annual earnings limit before FRA is $22,320 (up from $21,240 in 2024). 2. In the year you reach FRA, there's a special monthly test that only counts earnings in the months before you reach FRA. Since you reach FRA in June, only your March-May earnings count (about $10,500 based on your $3,500/month). 3. Since your pre-FRA earnings are well below the limit, you won't have any benefits withheld. 4. The $52 reduction in your monthly benefit is permanent for starting 5 months early, but it's minimal compared to getting 5 extra months of payments. 5. Don't forget that when you file, you'll automatically be deemed to have filed for spousal benefits too, so you'll get your own retirement benefit plus the $500 spousal top-up (assuming that's the correct amount). Starting in January seems like the optimal choice for your situation.
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Dominique Adams
•Thank you for explaining that so clearly! I didn't realize they only count the months before FRA in the year I reach FRA - that makes a huge difference. So even if I earned more later in the year (July-December), it wouldn't matter for the earnings test? That's fantastic news.
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Angel Campbell
Wait, I'm confused... I thought after you turn 66 there's NO earnings limit anymore? Isn't that right? Why are people talking about limits if she's already 66 and 1 month?
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TommyKapitz
•That's a common misconception. The earnings limit applies until you reach your Full Retirement Age (FRA), not just age 66. For people born in 1959 (turning 66 this year), FRA is 66 and 10 months. For those born in 1960 or later, FRA is 67. So even though the poster is 66+, they're still subject to the earnings limit until reaching their personal FRA in June 2025.
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Payton Black
My situation was almost identical! I started benefits 4 months before my FRA last year and was so worried about the earnings limit. Called SSA like 5 times and never got through. So frustrating! I finally got someone to explain the monthly limit for the year you reach FRA and it was such a relief.
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Harold Oh
•If you're still having trouble reaching SSA by phone, I'd highly recommend trying Claimyr (claimyr.com). I was in the same boat - calling for days and getting nowhere. Claimyr got me connected to an actual SSA agent in under 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU It was worth it to get my questions answered about my spouse's delayed retirement credits without spending days on the phone.
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Amun-Ra Azra
Two CRITICAL things nobody mentioned: 1) Make SURE you apply for both your retirement AND spousal benefits at the same time!! I messed this up and only got my own benefit for 3 months because I didn't check the right box. 2) When you file, it asks if you want benefits to start in the month you apply or if you want to specify a different month - you can choose January even if you apply now.
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Dominique Adams
•That's really helpful information! I was planning to apply online but I'm nervous about making mistakes with the forms. I'll make sure to request the January start date and be careful about selecting both benefit types.
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Louisa Ramirez
My mom always said TAKE THE MONEY WHEN YOU CAN GET IT!!! 😂😂😂 If you wait til June that's 5 months of checks you'll never see again!
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Marilyn Dixon
•While I understand the sentiment, this isn't always the best advice for everyone. For some people with longer life expectancies or those trying to maximize survivor benefits, waiting can be financially advantageous. But in OP's specific situation with a small reduction and being close to FRA, starting earlier does make mathematical sense.
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Amun-Ra Azra
I don't think your month of birth works with your FRA date. If you're 66 and 1 month NOW (Jan 2025), you were born in Dec 1958, which means your FRA would be 66 and 8 months (Aug 2025), not June 2025. Can you double-check this? It might change your calculations.
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Dominique Adams
•You're right! I made a mistake in my post. My birthday is actually in October 1958, making me 66 and 3 months now. My FRA is 66 and 8 months, which would be June 2025. Thank you for catching that - the months definitely matter for these calculations.
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TommyKapitz
Based on all the information and corrections, here's a summary of your optimal strategy: 1. Apply now but specify January 2025 as your benefit start month 2. Make sure to apply for both your retirement benefit and the spousal benefit simultaneously 3. Your March-May earnings ($10,500) are well below the pre-FRA limit, so no benefits will be withheld 4. The permanent reduction for starting 5 months early is minimal ($52/month) compared to receiving 5 extra months of payments 5. After June 2025 (your FRA), you can earn unlimited amounts without affecting your benefits Taking benefits in January 2025 appears to be the mathematically optimal choice in your specific situation.
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Dominique Adams
•Thank you everyone for your help! I feel so much more confident in my decision now. I'm going to apply this week and select January for my start date. It's such a relief to understand how the earnings limit actually works and know that my calculations make sense.
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