Taking SS benefits before FRA while working over earnings limit - will they just withhold payments later?

Yes, if your mom claims early and exceeds the earnings limit, SSA will withhold future payments rather than asking for money back. For 2025, they withhold $1 in benefits for every $2 earned above the limit. So if she exceeds the limit by $5,000, they would withhold $2,500 in benefits, typically by suspending monthly payments until that amount is recovered. And you're correct about the second point - this is called the "adjustment of the reduction factor" (ARF). Months where benefits are completely withheld due to earnings don't count in the early retirement reduction calculation. When she reaches FRA, SSA will recalculate and give her credit for those months, which will increase her monthly benefit slightly. Whether this strategy makes sense depends on her specific situation, but you've identified the key mechanics correctly.

My brother did this exact thing last year!!! He started SS at 63 but was still working good money as a consultant. SSA held back like 4 payments this year but he said it was still worth it bcuz he needed the cash flow for the months they did pay him. He told me they don't make u pay anything back they just skip some checks. But u should really call SSA direct to check your moms exact #s

I disagree with the advice you're getting. Your mother should NOT claim early if she's going to keep working above the earnings limit! The permanent reduction for claiming 18 months early is about 10% of her benefit FOREVER. That's thousands of dollars over her lifetime! The adjustment at FRA for withheld months helps a tiny bit but doesn't come close to making up for the early filing reduction. A better strategy would be for her to find other ways to meet expenses for 18 months, then claim her FULL benefit at FRA and keep working with NO earnings limit.

A lot of people don't know this but sometimes the SSA makes mistakes with the ARF recalculation!!! My husband had 7 months of benefits withheld when he was 63 because of work but when he hit FRA they DIDN'T adjust his benefit up like they were supposed to!! We had to go to the office with all his paperwork and PROVE which months were withheld. Make sure ur mom keeps all her paperwork!!!

Hi - one important point I haven't seen mentioned yet: The earnings limit is much higher in the year your mom reaches FRA. For 2025, in the months before reaching FRA during her FRA year, she can earn up to $56,520 (estimated based on 2024 figures), and they only withhold $1 for every $3 over the limit, not $1 for $2. So potentially, if most of her earnings would happen during that partial FRA year, she might face much less withholding than you're calculating.

just want to make sure you realize theres 2 different things - the SSI program and the retirment benefits program. SSI has strict income limits and resources limits but retirement doesn't have resources limits just the earnings test. sounds like your talking about retirement but just making sure

Also consider how this impacts her taxes! If she works AND collects SS, up to 85% of her SS benefits could become taxable depending on her combined income. This is something people often overlook when making this decision.

my cousin had to pay back a big amount because she didnt report her earnings right. make sure ur mom keeps ssa updated on her income so she doesnt get a surprise bill!

Thank you all for the incredibly helpful advice! Here's my takeaway plan for my mom: 1. She'll request a detailed benefit estimate from SSA showing exact figures at different claiming ages 2. We'll calculate how many months might be withheld based on her expected earnings 3. We'll factor in the higher earnings limit for her FRA year 4. I'll help her create a system to track and report all earnings accurately 5. We'll weigh the permanent reduction against her immediate financial needs One last question - does anyone know if she would receive a notice from SSA before they withhold payments, or would they just stop coming?

This is such a complex situation and I really appreciate how thoroughly everyone has explained the mechanics! As someone who went through a similar decision with my father a few years ago, I wanted to add one more consideration that helped us: we created a simple spreadsheet to model different scenarios over her expected lifetime. We compared: - Total lifetime benefits if she waits until FRA - Total lifetime benefits if she claims early with various earnings levels - The break-even point where early claiming becomes advantageous In our case, my dad's immediate financial stress was severe enough that even with the permanent reduction, early claiming was the right choice. The peace of mind and financial stability it provided was worth more than the mathematical optimization. One practical tip: if she does decide to claim early, consider setting aside a small portion of each benefit payment in a separate account. This can help cover any unexpected gaps if more months than anticipated get withheld due to earnings fluctuations. Good luck with whatever decision you make - it sounds like you're approaching this very thoughtfully!

One thing to keep in mind is that SSA typically reviews earnings annually, not monthly. So if your mom claims early and works above the limit, she likely won't see immediate withholding - it usually happens the following year after they process her annual earnings report. This means she could receive several months of full benefits before any withholding occurs. Also, I'd suggest having her create a my.ssa.gov account if she hasn't already. She can view her earnings record, get benefit estimates, and track any changes to her account online. This makes it much easier to stay on top of everything and catch any errors early. The decision really comes down to her specific circumstances. If she's facing immediate financial hardship and the early benefits would prevent more serious consequences (like losing her home), then the permanent reduction might be an acceptable trade-off. Just make sure you're both prepared for the complexity of managing the earnings test if she continues working.