Social Security retirement timing question - December 2026 vs January 2027 to avoid tax issues?

Great question about Social Security timing! First, understand that the earnings test only applies if you're below your Full Retirement Age (FRA), which is likely 67 if you're turning 65 in 2026. For 2025, the annual earnings limit is $21,240 for those below FRA (this increases yearly). If you start in December 2026, they'll count your entire 2026 earnings, but there's a special rule for the first year of retirement. In your first retirement year, SSA will use a monthly test instead of annual when it benefits you. This means even if your annual earnings are over the limit, they'd only reduce benefits for months where your earnings exceeded 1/12th of the annual limit. So if you fully retire in December 2026, only your December earnings would matter for that calculation.

The gov't always takes our money no matter when u file!!!! I started my SS in Febrary and they still counted ALL my income from January. It's a TRAP!!! The whole system is designed to make us wait longer.

To clarify what others are saying - when you first retire, Social Security applies what's called the "Grace Year Rule" or "First Year Rule." Here's how it works: If your 2026 total earnings are over the annual limit, but you RETIRE and start benefits in December, SSA will pay full benefits for December IF you earn under the monthly limit for that month. For 2025, the monthly limit is $1,770 (again, this increases yearly). So if you stop working at the end of November, and have little or no earnings in December, you'll get your full December benefit even though your annual earnings were $87,000. However, if you continue working in December and earn over the monthly limit, that month's benefit would be affected. Either way, January 2027 starts a new year for earnings test purposes.

I had the same question last year! Called SS like 6 times and got 6 different answers lol. Ended up starting in January just to be safe.

I went through this exact situation. The biggest thing nobody mentioned yet is that we're talking about TWO separate issues: 1. The earnings test (which can reduce benefits if you're under FRA) 2. Taxation of Social Security benefits For the earnings test, the grace year rule others mentioned applies. For TAXATION of benefits - your 2026 Social Security income will be part of your 2026 tax return regardless of whether you start in December or January. Up to 85% of your SS can be taxable depending on your combined income (AGI + nontaxable interest + 1/2 of SS benefits). So if tax planning is your main concern, starting in December vs January makes little difference tax-wise for just one month of benefits.

Has anyone used Claimyr to get through to SSA? I've been trying to get specific answers about this exact situation for weeks but can't get anyone on the phone. Just saw a video about it (https://youtu.be/Z-BRbJw3puU) and wondering if it's worth trying? Their website claimyr.com says they can get you connected to a real person at Social Security without the wait. Considering how important this retirement timing decision is, might be worth it to get the official answer.

One last important point - your age matters tremendously here. You mentioned being 65 in November 2026, but Full Retirement Age for Social Security is currently between 66-67 depending on your birth year. If you start Social Security at 65, you're taking it early, which means: 1. Permanent reduction in benefits (about 13.3% less than your full benefit) 2. Subject to the earnings limit until you reach FRA If your FRA is 67, you might want to consider working the extra two years or at least understand the permanent reduction you're accepting by starting early.

my sister started in december last year and said the SSA people told her for the FIRST year only they do a monthly test not yearly. She made like $75k that year but didnt work in december so got her full check

Just to add my two cents - I retired end of October last year, started SS in November. Had already made $65K for the year, but because I truly retired (no more work income), I got both November and December payments in full. The monthly test saved me! Just make sure you're actually stopping work, not just reducing hours.

This is such a helpful thread! I'm in a similar situation but turning 62 next year. Reading through all these responses, it sounds like the key factors are: 1) Whether you're below Full Retirement Age (which affects the earnings test), 2) The grace year rule for your first year of benefits, and 3) Understanding that the earnings test and taxation are separate issues. For someone like Anastasia who's taking benefits before FRA, it seems like the December vs January timing mainly matters if you're still working in December. If you can truly stop working by November and have minimal December earnings, the grace year rule would let you collect that December benefit even with $87K in annual earnings. But as others pointed out, taking benefits at 65 means a permanent reduction compared to waiting until 67. Might be worth running the numbers on two more years of work + delayed benefits vs. starting early with the earnings test complications.

This is such valuable information for anyone facing this retirement timing decision! I'm a newcomer to this community but found this thread incredibly helpful. From reading through all the responses, it seems like the key takeaway is that the "grace year rule" can really work in your favor if you plan it right. The fact that Social Security will use whichever test (monthly vs annual) benefits you more in your first year of retirement is something I didn't know about. One thing I'd add for anyone else reading this - it might be worth creating a simple spreadsheet to compare scenarios. Factor in: 1) Your current salary and when you'd stop working, 2) The permanent reduction for taking benefits early vs waiting until FRA, 3) The monthly earnings limit for the grace year rule, and 4) How Social Security benefits get taxed as part of your overall retirement income. The taxation piece that @Aisha Rahman mentioned is really important too - even if you pass the earnings test, those benefits still count toward your taxable income for the year. Thanks to everyone who shared their real experiences! It's so much more helpful than trying to decode the official SSA publications on your own.

As someone new to this community, I've been following this discussion with great interest since I'm approaching a similar decision myself. The collective wisdom here has been incredibly helpful! One additional resource I'd recommend is the Social Security Administration's online retirement estimator at ssa.gov/benefits/retirement/estimator.html. While it doesn't give you the nuanced advice about timing that everyone has shared here, it can help you see the actual dollar impact of claiming at different ages. What really stands out to me from this thread is how the grace year rule seems to be one of Social Security's best-kept secrets. I had no idea that they would apply whichever test (monthly vs annual) works better for you in your first year of retirement. That's actually quite generous compared to what I expected from the government! For Anastasia and others in similar situations, it seems like the decision tree is: 1) Can you afford to wait until FRA for the full benefit? 2) If not, can you time your actual retirement to take advantage of the grace year rule? 3) Have you factored in the tax implications of adding SS income to your existing income? Thanks to everyone who shared their real experiences - it's made this complex topic much clearer for those of us still figuring it out!

As a newcomer to this community, I want to thank everyone for such an informative discussion! I'm 63 and facing a similar decision in the next few years, so this thread has been incredibly valuable. One thing that strikes me is how much the timing strategy depends on your specific situation. For someone like Anastasia earning $87k annually, the grace year rule could be a game-changer if she can truly stop working by November 2026. But I'm curious - has anyone here dealt with the situation where you have irregular income or consulting work after "retirement"? I'm wondering how the monthly earnings test works if your December income varies significantly from month to month. For instance, if I get a large consulting payment in December that puts me over the monthly limit, would that wipe out the benefit for that month even if my other months were low? Also, I noticed several people mentioned the challenge of getting through to SSA on the phone. Has anyone had success using their online services or local field offices for these kinds of detailed timing questions? Sometimes face-to-face might be easier than phone calls. Thanks again for sharing all your real-world experiences - it's exactly what someone new to retirement planning needs to hear!

As a newcomer to this community, I've been following this fascinating discussion about Social Security timing! I'm 58 and starting to think seriously about my own retirement strategy, so this thread has been incredibly educational. What really impressed me is how everyone here has shared such practical, real-world experiences that you just can't find in the official SSA materials. The grace year rule discussion was eye-opening - I had never heard of this before, and it seems like it could be a crucial factor in timing decisions. For anyone else reading this thread, I think the key insights are: 1) The grace year rule can be incredibly beneficial if you can truly stop working in your claiming month, 2) There's a big difference between the earnings test and taxation of benefits, 3) Taking benefits before Full Retirement Age has permanent consequences that need to be weighed carefully, and 4) Getting specific answers from SSA can be challenging but may be necessary for complex situations. @Anastasia Popov - based on everything discussed here, it sounds like if you can genuinely retire by November 2026 and keep your December earnings minimal, starting benefits in December could work well with the grace year rule. But the permanent reduction for claiming at 65 vs 67 is definitely something to calculate carefully. Thank you all for creating such a helpful resource for those of us navigating these complex decisions!

As a newcomer to this community, I've been reading through this incredibly informative discussion and wanted to add something I learned from my own recent experience. I'm 66 and just went through the Social Security claiming decision last year. One aspect that hasn't been mentioned much is the importance of getting your earnings record correct BEFORE you claim. I discovered several years where my earnings weren't properly credited, which would have significantly reduced my benefit calculation. The SSA website lets you create a my Social Security account where you can review your entire earnings history - I'd strongly recommend doing this well before your planned claiming date. Also, regarding the challenge of reaching SSA by phone that several people mentioned - I found that calling right when they open (8 AM ET) gave me much better success than calling later in the day. It still took about 45 minutes on hold, but that was much better than the 3+ hours others have experienced. For @Anastasia Popov and others considering the December vs January timing, another factor to consider is that if you claim in December 2026, you'll receive your first payment in January 2027 anyway (there's typically a one-month delay). So the practical difference in when money hits your account may be smaller than it appears. This community has been such a valuable resource - thank you all for sharing your real-world experiences!

As a newcomer to this community, I've been following this incredibly detailed discussion and wanted to share something that might help others in similar situations. I'm 64 and facing my own Social Security timing decisions soon. What really stands out to me from this thread is how the grace year rule seems to be the key factor for people like @Anastasia Popov who are considering claiming before their Full Retirement Age while still having significant annual earnings. The fact that SSA will apply whichever test (monthly vs annual) benefits you more in your first year is remarkably helpful. However, I keep coming back to the point several people made about the permanent reduction. At $87k annually, Anastasia is clearly still earning good money - and giving up 13%+ of her Social Security benefit forever by claiming at 65 vs 67 could mean tens of thousands of dollars over a full retirement. For anyone reading this thread, I'd suggest running the numbers on: 1) Two more years of $87k salary, 2) Two more years of 401k/retirement contributions, 3) Starting SS at 100% vs ~87% of full benefit, and 4) The difference in lifetime benefits. The grace year rule is great for timing, but the bigger question might be whether early claiming makes sense at all with that income level. That said, everyone's situation is different - health, other savings, family circumstances all matter. This discussion has been invaluable for understanding all the moving pieces!

As a newcomer to this community, I've been following this incredibly thorough discussion and wanted to add a perspective that might help others facing similar decisions. I'm 59 and starting to plan my own Social Security strategy, so this conversation has been incredibly educational. What strikes me most is how this thread perfectly illustrates the complexity of Social Security timing - there's no simple "one size fits all" answer. The grace year rule discussion has been eye-opening, and it seems like it could be a powerful tool for people who can genuinely retire in their claiming month. However, I keep thinking about the math that @Mason Davis outlined. For someone earning $87k annually, the opportunity cost of claiming early might outweigh the benefits of strategic timing. Two additional years of high earnings plus starting benefits at 100% instead of ~87% could potentially be worth hundreds of thousands over a lifetime. That said, I understand there are other factors - health concerns, job security, family needs, or simply wanting to enjoy retirement while you're healthy enough to do so. Money isn't everything. For @Anastasia Popov specifically, based on everything discussed here, it seems like your decision tree might be: 1) Can you realistically work until 67 and is it worth the extra money? 2) If you do claim early, can you structure your retirement to take advantage of the grace year rule? 3) Have you factored in all the tax implications? Thank you to everyone who shared their real experiences - this has been incredibly valuable for those of us still planning our retirement timing!

As a newcomer to this community, I've been reading through this incredibly comprehensive discussion and wanted to share some thoughts that might help others in similar situations. I'm currently 63 and will be facing these same Social Security timing decisions in the coming years. What's been most enlightening about this thread is how it demonstrates that Social Security strategy isn't just about one rule or provision - it's about understanding how multiple factors interact. The grace year rule that several people explained is fascinating and seems like it could be a real game-changer for people who can truly stop working in their claiming month. However, I keep coming back to the fundamental question of whether claiming at 65 makes financial sense when you're still earning $87k annually. The permanent reduction of roughly 13% that @Nia Davis and others mentioned could represent a significant amount over a 20+ year retirement. Sometimes the best timing strategy is simply waiting. For anyone else reading this who might be in a similar boat, I think the key questions are: 1) What's your health situation and family longevity? 2) Do you have other retirement savings to bridge the gap if you work longer? 3) Are you burned out and ready to retire regardless of the financial optimization? 4) Have you run the actual numbers on lifetime benefits? @Anastasia Popov - your original question about December vs January timing has sparked such a valuable discussion! Based on everything shared here, it sounds like if you do decide to claim at 65, the grace year rule could definitely work in your favor if you can structure your retirement properly. But the broader question of whether to claim early at all with your income level might be worth additional consideration. Thank you to everyone who has shared their real-world experiences and technical knowledge. This is exactly the kind of practical guidance that makes these complex decisions more manageable!

As a newcomer to this community, I've been thoroughly impressed by the depth and quality of this discussion! I'm 62 and will be eligible for Social Security in just a few years, so this thread has been incredibly timely and educational for me. What really stands out is how this conversation has evolved from a specific timing question into a comprehensive masterclass on Social Security strategy. The grace year rule explanation was particularly eye-opening - I had never heard of this provision before, and it seems like it could be a crucial factor for anyone considering early retirement while still having significant earnings. However, like several others have mentioned, I keep coming back to the math on that permanent reduction. For someone earning $87k annually, the financial impact of claiming at 65 vs 67 could be substantial over a lifetime. It makes me wonder if sometimes the best timing strategy is simply patience. @Anastasia Popov - your question has sparked such a valuable resource! Based on everything discussed here, it seems like you have a solid understanding of your options now. If you do decide to claim at 65, the grace year rule could definitely work in your favor with proper planning. But the broader strategic question about early vs. full retirement age claiming with your income level might warrant additional consideration. Thank you to everyone who has shared their real-world experiences and technical knowledge. This is exactly the kind of practical, supportive community that helps people navigate these complex financial decisions with confidence. As someone new to retirement planning, I feel much better equipped to handle my own Social Security timing decisions thanks to this discussion!