Social Security retirement earnings limit confusion - bonus pay and Part B deductions

For your first question - you should definitely have your employer complete Form SSA-131 (Employer Report of Special Wage Payments) before you retire. This form tells SSA which payments don't count toward the annual earnings limit because they were earned in a previous year. Bonuses for 2024 work and vacation pay you earned before retirement don't count against your 2025 earnings limit even if paid in 2025. Submit it proactively rather than waiting for SSA to contact you. This prevents them from incorrectly reducing your benefits when they get your 2025 earnings report from the IRS (which only shows when money was paid, not when it was earned). For your second question - yes, it's normal to have multiple months of Medicare premiums taken from your first check. SSA often needs to catch up on premiums that were due from your enrollment date.

idk about that form but when I retired 2 years ago they took a BUNCH of money from my first check for medicare!! I called and they said its normal. something about it being retroactive from when I signed up. I was so mad because nobody warned me and I was counting on that full amount!!! 😡

my husband had same thing with the bonus pay. we didnt do anything and then 10 months later got a letter saying we owed back $4700 in benefits!!! had to setup a payment plan. definitely do that form!!

As a retired SSA Claims Specialist, I can provide some guidance: 1) Form SSA-131: Have your employer complete this ASAP. This form identifies Special Wage Payments (SWP) - income received after retirement for work performed before retirement. Without this documentation, SSA will count your bonus and vacation payout toward the 2025 earnings limit. Submit it to your local field office immediately after receiving it from your employer. 2) Medicare Premiums: Yes, typically SSA will deduct 1-3 months of premiums from your first check depending on your enrollment timeline. This is standard procedure to collect any premiums that became due between when your Medicare coverage began and when your cash benefits start. Regarding the earnings limit, remember that in your first retirement year (2025), SSA can use the monthly earnings test instead of the annual one. This means after you stop working, you can receive full benefits regardless of your annual earnings. But you must document those special wage payments properly with the SSA-131.

I got caught in this exact same situation last year. My company paid out my bonus in January 2024 for work done in 2023, and I retired in February 2024. Social Security did reduce my benefits because they thought I made too much money in 2024! I had to spend HOURS on the phone trying to get through to someone who could help me. I wish I had known about that form beforehand. I finally found this service called Claimyr (claimyr.com) that got me through to an actual SSA agent in about 20 minutes instead of spending days trying to get through. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU It saved me so much frustration and I was able to get the situation fixed. Definitely get that form filled out NOW rather than dealing with the headache later!

dont even get me started on medicare deductions! they took 3 months from my first check and never told me ahead of time... i think they do it on purpose so u cant complain until after they already took the money!!

To follow up on your question about the monthly earnings test: Yes, you're understanding correctly. In your first year of retirement, SSA can apply the monthly test. How it works: For any month you earn under $1,920 (the 2025 monthly limit) AND don't perform substantial services in self-employment, you'll receive your full benefit regardless of your annual total. So if you retire March 31st: - January-March: You'd lose benefits for months you earned over $1,920 - April-December: You'd receive full benefits as long as those special wage payments (bonus/vacation) are properly documented as not counting for those months This is why the SSA-131 is crucial - it ensures those special payments aren't incorrectly counted as monthly earnings after you've stopped working. Regarding Medicare premiums: Your award letter should have explained the multiple deductions, but many don't notice this detail. The first check typically includes catch-up premiums for any months you were Medicare-eligible before benefits began.

The whole earnings limit thing is just another way the government punishes people who want to work. Why should they penalize you for getting a bonus you EARNED? The system is completely broken. And don't get me started on how they handle Medicare premiums...

As someone who just went through this process last year, I can definitely relate to your confusion! The earnings limit rules are really tricky, especially in your first retirement year. One thing I learned the hard way is that you should also keep detailed records of WHEN you actually performed the work that earned you the bonus and vacation pay. The SSA-131 form is great, but having your own documentation (like emails showing the bonus was for 2024 performance, or records of when you accrued the vacation days) can be really helpful if there are any questions later. Also, regarding the Medicare premiums - when I called about the multiple deductions on my first check, the representative told me that the exact number of months they deduct depends on when your Medicare Part B coverage actually started versus when your Social Security benefits begin. Sometimes there's a gap that creates the catch-up situation. The good news is that after that first check, everything should normalize to the regular monthly amounts shown in your award letter. Just budget for that first check to be significantly lower than expected!

Just wanted to add something that might help with timing - when you submit that SSA-131 form, make sure to keep a copy for your records and consider sending it via certified mail or delivering it in person to get a receipt. I've heard stories of forms getting "lost" in the system. Also, if you're planning to do any part-time work or consulting after you retire, be really careful about the monthly earnings test. Even small amounts can add up quickly, and it's easy to accidentally go over that $1,920 monthly limit without realizing it. One more tip: when you do start receiving your benefits, keep a close eye on your first few payments. Sometimes there can be delays in processing the SSA-131, so they might initially withhold benefits and then adjust later. If that happens, don't panic - just follow up with documentation showing you submitted the form properly. Good luck with your retirement! It sounds like you're being really proactive about avoiding these common pitfalls.

I went through a very similar situation when I retired early at 63 last year. The earnings limit confusion is real! A few additional thoughts that might help: 1) For the SSA-131 form - I'd recommend calling your HR department to confirm they're familiar with this form. Some smaller companies haven't dealt with it before and might need guidance. The form needs to clearly distinguish between wages for work performed before vs. after your retirement date. 2) Regarding Medicare premiums - what helped me was calling Medicare directly (not SSA) at 1-800-MEDICARE to understand exactly which months they were collecting for. Sometimes the timing of when you enrolled in Part B versus when your Social Security benefits start creates these catch-up situations. 3) One thing I wish I'd known: if you're planning any freelance or consulting work after retiring, even small amounts count toward that monthly limit. I almost got caught because I did some consulting work in month 4 of retirement and didn't realize those payments would count. The first few months of retirement benefits can definitely be bumpy with all these adjustments, but it does smooth out once everything is properly documented and processed. You're smart to be asking these questions upfront rather than dealing with overpayments later!

One additional resource that might be helpful - the SSA website has a detailed publication called "How Work Affects Your Benefits" (Publication No. 05-10069) that explains the earnings test rules and special wage payments in more detail. It's a bit dry to read, but it covers scenarios exactly like yours. Also, regarding the Medicare premium deductions - I'd suggest looking at your Medicare Summary Notice (MSN) when you get it. This will show you exactly which months of premiums were collected and help you verify that the deductions were correct. Sometimes there can be errors, and it's easier to catch them early. One last tip: consider setting up a my Social Security account online if you haven't already. This will let you monitor your benefit payments and see any adjustments in real-time rather than waiting for paper statements. It's been invaluable for tracking everything during my first year of retirement. The learning curve is steep, but you're asking all the right questions. The fact that you're being proactive about the SSA-131 form will save you a lot of headaches down the road!