Social Security retirement timing question - December 2026 vs January 2027 to avoid tax issues?
I'm planning for retirement and trying to figure out the best timing for Social Security. I earn about $87,000 annually right now. If I start collecting Social Security benefits in December 2026, will the government count my entire year's wages for 2026 when determining if I exceed the earnings limit? Or would it be smarter to wait until January 2027 to start collecting? I'm specifically concerned about the tax implications and don't want to lose benefits if I can help it. I'll be 65 in November 2026 if that matters. Any advice would be appreciated!
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Sean Murphy
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.
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Anastasia Popov
•Thank you! Does that mean I could potentially receive my full December benefit even though my annual income was $87,000? I'm not sure I fully understand the monthly test. Would they look at how much I earned specifically in December?
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Zara Khan
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.
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Luca Ferrari
•That's not accurate. They use something called the grace year provision when you first retire. Sounds like you might have earned over the monthly limit even in the month you claimed.
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Nia Davis
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.
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Anastasia Popov
•This is exactly what I needed to know! So basically I need to make sure I don't earn more than the monthly limit in December 2026 if I want to collect for that month. If I'm still working in December though, it sounds like waiting until January would be better. Thank you!
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Mateo Martinez
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.
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QuantumQueen
•I tried calling Social Security about something similar last month and spent 3 hours on hold before getting disconnected! So frustrating.
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Aisha Rahman
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.
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Anastasia Popov
•Oh wow - I didn't realize those were two separate issues! So even if I pass the earnings test and get my December benefit, that benefit could still be taxed based on my whole year's income? That's really helpful to understand.
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QuantumQueen
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.
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Zara Khan
•Never heard of it but let us know if it works!!! I gave up after 2 weeks of trying to call them about my missing COLA increase.
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Aisha Rahman
•I actually used Claimyr last month when I needed to sort out an issue with my direct deposit. It worked surprisingly well - had me connected to SSA in about 20 minutes when I'd previously wasted hours on hold. For something like retirement timing where you need specific answers about your situation, it's probably worth it to speak directly with an SSA rep.
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Nia Davis
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.
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Anastasia Popov
•That's a really good point I hadn't fully considered. My FRA is indeed 67. I knew there was a reduction for taking it early, but I didn't realize the earnings limit would continue to apply until I reach 67. Definitely gives me more to think about - maybe working a bit longer makes more sense financially.
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Mateo Martinez
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
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Sean Murphy
•Your sister got the right information! That's exactly how the "grace year" provision works - in your first year receiving benefits, they'll apply the monthly test if it's to your advantage.
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Luca Ferrari
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.
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