Social Security timing question: Filing at 66 vs. FRA in April 2025 - working with employer insurance

You're right to question this. Filing in January 2025 when his FRA is April 2025 means he'd be filing 3 months early, resulting in a permanent reduction of about 1.7% (roughly 0.56% per month). If that translates to $200 less per month as you calculated, waiting those three months makes financial sense unless there's an urgent need for the income. Regarding Medicare - good news! He does NOT have to take Medicare when he starts collecting Social Security if he has creditable employer coverage from a company with more than 20 employees. He can delay Medicare enrollment without penalty until he stops working or loses that coverage. As for earnings limits, once he reaches his FRA in April 2025, there will be NO earnings limit. Before FRA, in 2025 the earnings limit will likely be around $22,500 (the 2024 limit is $21,240 plus COLA). Exceeding this before his FRA would reduce benefits by $1 for every $2 over the limit.

My husband did this exact thing last year!!! Filed 2 months b4 his FRA because we needed $$ for a new roof. BIG MISTAKE!!!! That reduction is FOREVER and it adds up over time. If u can wait the 3 months DO IT!!!!!

To answer your follow-up question about the earnings limit during those 3 months: Yes, the earnings limit would apply from January-March 2025 since he hasn't reached FRA yet. With an annual salary of $75,000, that's about $18,750 for that quarter, which exceeds the likely monthly limit. However, there's a special rule for the calendar year in which your husband reaches FRA. Only earnings before the month he reaches FRA count toward the limit, and the limit is higher (about $59,520 for 2025 based on 2024's $56,520 plus estimated COLA). Also, benefits are only reduced $1 for every $3 over the limit during this period. So if he files in January, only his Jan-March earnings count toward this higher limit, and would result in some withholding. But once he reaches FRA in April, benefits would be recalculated to credit back those months of reductions over time.

I was in a similar situation and chose to wait until my exact FRA. Those few months went by quicker than I expected, and knowing I'm getting my full benefit amount forever gives me peace of mind. The permanent reduction might not seem like much now, but it adds up over decades of retirement. Re: Medicare - not having to enroll if he has employer coverage is a huge benefit many folks don't realize. Make sure he keeps documentation of his continuous employer coverage for when he does eventually enroll in Medicare to avoid any questions about late enrollment penalties. For the earnings limit question, while technically there's a special rule in the year you reach FRA, why deal with the hassle of withholding and recalculation if waiting just 3 months avoids it entirely? Simple is often better when dealing with SSA!

Has anyone actually tried calling the SS office about this lately? I've been calling for THREE WEEKS trying to get answers about a similar situation. Either constant busy signals or disconnected after 45+ minutes on hold. Their website is impossible to navigate, and the closest office is 50 miles away with no appointments available for months. This system is BROKEN.

After all this great advice, I think we're going to wait until April for my husband to file at his exact FRA. The permanent $200 reduction just isn't worth it, especially since he's still working full-time and doesn't need the SS income immediately. It's a relief to know he can keep his employer health insurance and delay Medicare enrollment without penalties. One less thing to worry about! Thank you all so much for helping me understand these complicated rules. I feel much more confident about our plan now.

My husband was in this EXACT situation!!! His bday is in March but he waited till June to file (FRA) because we heard horror stories about the SSA messing up people's payment amounts when they file right at their birthday month! So we waited a few extra months just to be safe. Dunno if thats really necessary but we didnt want any mistakes!!!!

One other thing to consider - since your husband is still working at a good salary, his Social Security benefit amount might actually increase slightly if his current earnings are higher than some earlier years in his earnings record. SSA uses the highest 35 years of indexed earnings to calculate benefits. This is especially true if he had any years with low earnings or gaps in his work history. Each additional high-earning year can bump out a lower year in the calculation. So waiting those extra months could potentially increase his benefit by more than just avoiding the early filing reduction.