Social Security survivor benefits and annual earnings limit - monthly or yearly calculation?

The earnings limit is ANNUAL but it gets complicated. SSA will look at your $23,400 annual limit for 2025, but they can apply a monthly test when you first start benefits. So for the first year, they might look at your monthly earnings ($1,950/month) for any month after you become entitled to benefits. After that first year, it switches to strictly annual. Careful though - if you earn over the limit, they don't just reduce benefits a little. For every $2 you earn above the limit, they withhold $1 in benefits. So if you earn $25,400 (which is $2,000 over), they'll withhold $1,000 in benefits. I went through this nightmare last year. Filed for survivor benefits at 63 and had NO IDEA how strict they would be about my earnings! Good luck keeping track of it all!

You're asking exactly the right question. The earnings test is primarily an ANNUAL limit of $23,400 for 2025 (for those under FRA the entire year). However, there's also a monthly earnings test that applies in the first year you receive benefits. Here's how it works: 1. In your first year (2025), SSA will apply a monthly test for any month you're entitled to benefits. You can earn up to $1,950 in any month without reduction. 2. Starting January 2026, only the annual test applies until you reach your FRA in March 2026. 3. Once you reach FRA in March 2026, the earnings test disappears completely. If you exceed the annual limit, SSA withholds $1 in benefits for every $2 you earn above the limit. But there's good news - when you reach FRA, SSA recalculates and gives you credit for months they withheld benefits.

its yearly. My husband went thru this. once u hit 23400 for the YEAR they take $1 for every $2 over. but they dont take it monthly they do a big adjustment at tax time the next year when they get ur W2. Big headache. And keep track urself don't trust SSA to get it right!!

I've been helping my mom with this exact situation. For the first year receiving benefits, it's BOTH monthly and yearly. You can't earn more than $1,950 in any month, and for the year you can't earn more than $23,400 total. After the first calendar year, it switches to just the annual limit. So for 2026, you'd only need to worry about the annual limit until you reach FRA in March, then you can earn unlimited. Be warned though - if you go over the limit, they don't just take money from that month. They can suspend your benefits entirely for multiple months until they've recovered the amount owed. My mom had her payments stopped for 3 months straight and it created a huge financial problem.

I dealt with this myself when taking survivor benefits. In the first year, SSA applies something called the "Grace Year" rule which uses a monthly test. If you earn under $1,950 in any month, you get full benefits for that month even if you earn over the annual limit for the year. For example, if you make $30,000 in 2025 but $5,000 of that was in months where you earned less than $1,950, they'll only count $25,000 against the annual limit. I'd recommend keeping a detailed spreadsheet of your monthly earnings. If you go over, they'll want some of the money back, and it can take FOREVER to straighten out with SSA. I was on hold for 4+ hours multiple times trying to talk to someone about my earnings report.

do you have to report your earnings to SSA as you go, or do they just find out at tax time next year? I'm in a similr situation and not sure if i need to be calling them every month or what

Just to add some extra info - the rule changes in the year you reach FRA. In the months of 2026 BEFORE you reach FRA in March, the earnings limit is higher - about $62,000 for the year, which breaks down to roughly $5,167 per month. And they only withhold $1 for every $3 you earn over the limit (not $1 for every $2 like when you're under FRA the whole year). Also, only earnings before the month you reach FRA count. So once you hit your FRA in March 2026, you can earn UNLIMITED income with no reduction in benefits. Mark that month on your calendar!!

FRIENDLY WARNING from someone who's been there: SSA is TERRIBLE at implementing these earnings limit reductions correctly!!! They messed up my benefits THREE TIMES, sending me overpayment notices for money I didn't actually owe. Keep DETAILED records of everything - your monthly income, your communications with SSA, EVERYTHING. And when they inevitably mess up your benefits calculation, be prepared to spend HOURS on the phone getting it fixed. The system is broken and understaffed.