Social Security retirement earnings limit confusion - retiring January vs February 2025

The monthly earnings test only applies in your first year of retirement. If you retire in January, you'd be subject to the annual limit ($22,300 for 2025) for the entire year. If you retire in February, you can use the monthly test ($1,860/month) for the remaining 11 months, regardless of what you earned in January. So if you want to earn more than $22,300 total for the year, starting benefits in February might be better because January earnings won't count against you. But if you'll earn less than $22,300 total for the year, it doesn't matter when you start - you won't be penalized either way.

You've got the key question right, but there's a critical detail to understand about the monthly earnings test. It only applies in the first year you claim benefits AND ONLY in months you're considered officially "retired" - meaning you earn under the monthly limit ($1,860) and don't perform substantial services if self-employed. Scenario 1 (Jan 1 start): Annual limit of $22,300 applies for all of 2025. If you earn more, SSA withholds $1 in benefits for every $2 over the limit. Scenario 2 (Feb 1 start): You can earn unlimited in January since you're not collecting benefits. Then from Feb-Dec, you can use the monthly test IF you stay under $1,860 each month. Going over even once switches you to the annual test for the rest of the year.

I'm gonna do what you're talking about right now!!! I turn 65 next month and I work construction so I make ALOT in summer (like $7000/month) and hardly anything in winter. So I'm starting SS in November and will make all my money before then, then "retire" and use the monthly limit for Nov and Dec. It's the best way to maximize income + SS when you have seasonal or irregular income!!! The SSA website has this info but it's REALLY hard to find. The monthly grace period is a life saver for those of us with irregular income!!!!

If you're trying to reach SSA about this, good luck. I spent 3 days trying to get someone on the phone about MY retirement earnings question last month. Each time I waited over an hour before getting disconnected. Finally I used a service called Claimyr (claimyr.com) to get through - they held my place in line and called me when an agent was ready. Made the whole process so much easier and I got the answers I needed. They have a video showing how it works here: https://youtu.be/Z-BRbJw3puU Regarding your question - the agent confirmed exactly what others are saying: in your first year, you can use either the annual OR monthly limit. Monthly only works if you stay under the limit every month after you start benefits.

I JUST WENT THROUGH THIS EXACT SITUATION and let me tell you the SSA 'advice' was TERRIBLE!! I was told 3 different things by 3 different people. Here's what ACTUALLY happened: I retired in March last year and earned $15k in Jan/Feb. They STILL tried to say I exceeded the annual limit because my W2 showed over the limit for the year!!! I had to FIGHT with them to apply the monthly test. Took MONTHS to resolve and they withheld benefits incorrectly. Get EVERYTHING in writing!!! And DOCUMENT every call with date, time and who you spoke with. The left hand doesn't know what the right hand is doing over there!!

wait are you still working? if your working you can make as much as you want until you officially retire. its only once you start taking SS that the limits kick in

To directly answer your original question: If you're going to earn a substantial amount in early 2025 (over the annual limit of $22,300), then starting benefits in February would be better mathematically. You'd have unlimited earnings in January, then could use the monthly test for Feb-Dec as long as you stay under $1,860 each month. If you start in January, you'd be subject to the annual limit for the whole year, and they'd withhold $1 in benefits for every $2 you earn over $22,300. Just know that if you use the monthly test and exceed $1,860 in even a single month after starting benefits, you'd switch to the annual test for the remainder of the year.

my cousin did this wrong and they made him pay back like 5 grand in benefits they shouldnt have paid him. be really careful with this stuff

One more important detail - the earnings test only counts wages or self-employment income. It doesn't count investment income, pension payments, annuities, capital gains, or government benefits. So if any of your income comes from these sources, they won't count toward either the monthly or annual limits. And remember that the earnings reduction isn't a permanent loss. Once you reach your Full Retirement Age, your benefit will be recalculated to credit back the months when benefits were withheld.