Will I face SS benefit penalty earning $62,160 in 2025 if FRA is January 2026?

You're not going to like this answer, but since your FRA isn't until January 2026, you WILL be subject to the lower annual earnings limit for 2025, not the higher FRA-year limit. The $62,160 limit only applies to people who reach their FRA during that calendar year. For people who won't reach FRA during the calendar year (that's you), the 2025 limit will probably be around $24,000 (based on projections from the 2024 limit). And they'll deduct $1 in benefits for every $2 you earn above that limit. The calculation is based on your earnings for the entire year, but they do apply a monthly test in the first year you receive benefits. So they'll only count earnings after you start receiving benefits in July.

The previous poster is mostly correct, but I can add some nuance here. You're right that the higher earnings limit of $62,160 for 2025 only applies to people reaching FRA in that calendar year, which you won't. However, there's an important detail about how SSA calculates this in your first year of benefits. They apply a monthly earnings test rather than just looking at your annual income. So for 2025, you'd be subject to approximately $2,000/month earnings limit (assuming the annual limit is around $24,000). From July-December 2025, that means you could earn about $12,000 total without penalty. And remember, in January 2026 when you reach FRA, the earnings limit disappears completely regardless of how much you earn.

I had this EXACT issue last year, only my FRA was January 2024 and I started benefits in August 2023. What really matters is the month-by-month income AFTER you start receiving benefits. The SSA only counted my earnings from August-December against the limit. What I earned January-July didn't matter at all. So in your case, only your earnings from July-December 2025 would count toward that lower limit. But be careful with December 2025! A paycheck received in January 2026 still counts as December 2025 earnings if that's when you earned it.

Everyone's giving good info, but let me clarify something important: for the earnings test, they count when you EARN the money, not when you receive it. This trips up a lot of people. For example, if you work in December 2025 but don't get paid until January 2026, that money still counts toward your 2025 earnings limit - even though you'd be at FRA when you physically receive the paycheck. I learned this the hard way and had an unexpected overpayment notice! Also note that some income doesn't count toward the earnings test - only wages and self-employment income count. Pensions, investments, etc. don't affect it.

All I know is I tried calling Social Security SEVEN TIMES to get a straight answer about this same question when I was retiring and kept getting disconnected or waiting for hours. Super frustrating! Finally my nephew showed me Claimyr.com which got me through to an actual agent in about 15 minutes. They have this video demo too https://youtu.be/Z-BRbJw3puU that shows how it works. The agent confirmed exactly what others are saying - they only count what you earn after you start receiving benefits in that first year.

The whole earnings limit thing is SO UNFAIR!! I'm in almost same situation but my FRA is February 2026. The fact that missing the cutoff by a month or two costs us TENS OF THOUSANDS in potential earnings is ridiculous! I actually considered working January-June, then quitting July-December, then starting work again in January 2026. But my employer wouldn't hold my position. The whole system punishes people born at the "wrong" time of year. I've written my congressman about this nonsense!

Let me share a planning tip based on your specific situation. Since you'll reach FRA in January 2026, consider this strategy: 1. Work normally January-June 2025, earning whatever you need 2. Start benefits in July 2025 3. Either limit your July-December 2025 earnings to about $12,000 total OR 4. If you need to earn more, consider delaying your benefits until January 2026 Alternatively, if your overall financial situation allows, you could consider delaying benefits entirely until January 2026 when you reach FRA. This would increase your monthly benefit amount slightly AND eliminate any concern about earnings limits.

One more important thing to understand: if some of your benefits are withheld because you exceed the earnings limit in 2025, they're not permanently lost. Once you reach FRA in January 2026, the SSA will recalculate your benefit amount to credit you for the months when benefits were withheld. This results in a permanent increase to your monthly benefit amount going forward. Many people don't realize this - exceeding the earnings limit isn't completely punitive. You eventually get the money back through higher monthly payments for the rest of your life.

Thank you all for such helpful information! I think I now understand my options much better. I'm going to: 1. Work my normal schedule January-June 2025 2. Start my SS benefits in July 2025 as planned 3. Carefully track my earnings to stay under approximately $2,000/month from July-December 4. Make sure any December work that gets paid in January is properly accounted for And most importantly, I'll try to get an official confirmation from SSA directly before finalizing my plans. It's frustrating how complicated they make these rules, especially for those of us who miss the calendar year cutoff by just a few weeks!