Will SS benefits be withheld if I earn $30K from January-June before collecting in August?
I'm planning to retire mid-year and start collecting Social Security before reaching my Full Retirement Age. Here's my situation: I expect to earn about $30,000 from January through June, then completely stop working on June 30th. If I begin collecting SS benefits in August of the same year, will SSA withhold money from my monthly checks because of the $30K I earned in the first half of the year? I'm confused about how the earnings test works when you stop working partway through the year. Does anyone know if there's a special rule or calculation for this scenario? Thanks for any help!
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Keisha Thompson
Yes, SSA will likely withhold some money because of the earnings test. For 2025, if you're under FRA for the full year, the annual limit is about $22,320 (they adjust it yearly). Since you're earning above that limit, they'll withhold $1 for every $2 you earn above the limit. But there's good news - there's a special rule for the first year of retirement that might help your situation.
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TechNinja
•Thanks for responding! What's this special rule you mentioned? Does it mean they won't withhold as much since I'm stopping work completely in June?
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Paolo Bianchi
my brother had this same problem last year!!! he worked till may and made like 25k then tried to get ss in october. they took some of his checks away at first but he talked to them and got it fixed with the monthly rule. something about only counting the months after you retire?
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TechNinja
•That's encouraging to hear! So there actually is a special rule that might help me. I wonder if I need to specifically request they apply this rule or if it's automatic.
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Yara Assad
What you're looking for is called the "Grace Year Rule" or "First Year Monthly Test." Since this is your first year collecting benefits, if you have a month where you earn under the monthly limit ($1,860 in 2025) AND don't perform substantial services in self-employment, that month becomes a non-service month and you'll receive your full SS benefit regardless of your annual earnings. So if you truly stop working completely in June, your August-December benefits should be safe from withholding. You'll need to proactively inform SSA about your work stoppage though.
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TechNinja
•This is exactly what I needed to know! So even though I'll be over the annual limit of $22,320, since I'll have $0 earned after June, those later months should be considered non-service months. That's a huge relief.
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Olivia Clark
My sister went through something similar and thought she'd be fine but then they came back a year later with an overpayment notice! Make sure you report your earnings correctly. The monthly rule does work but you have to make sure they know your exact situation.
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Javier Morales
WATCH OUT - if you're getting employer benefits after June (like healthcare, vacation payout, sick leave, etc.) the SSA might count those as earnings too! They hit me with an unexpected overpayment because my company paid out my unused vacation time in August even though I stopped working in May. The rules are RIDICULOUS and they don't explain them to you up front!
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Yara Assad
•That's a good point about special payments. However, if those payments are for work done before retirement (like accrued vacation), you can request SSA treat them as "special payments" earned when you were working, not after. You'll need to file an SSA-131 (Employer Report of Special Wage Payments) to have those properly categorized.
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Natasha Petrov
Have you tried calling the Social Security office directly? That's always the best way to get answers for your specific situation rather than relying on online advice that might not apply to your exact circumstances.
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TechNinja
•I tried calling twice but couldn't get through. Was on hold for almost 2 hours the second time before getting disconnected. It's frustrating because I really need to understand this before making my retirement decision.
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Connor O'Brien
•If you're having trouble reaching SSA by phone, I recommend trying Claimyr (claimyr.com). They helped me get through to an agent in under 20 minutes after I spent days trying to reach someone. They have a video that shows how it works at https://youtu.be/Z-BRbJw3puU. I was skeptical but it actually worked. The rep I spoke with was able to explain exactly how the earnings test would affect my specific situation, which gave me peace of mind about my retirement timeline.
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Paolo Bianchi
do u need to wait till august tho?? my friend applied in the same month he stopped working and it was fine
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Keisha Thompson
•There's actually a good reason to wait at least one month after stopping work before applying. Social Security benefits are paid the month after they're due, and you need to be eligible for the full month to receive benefits for that month. So if you stop working June 30th, July would be your first full non-working month, making August the first month you'd receive a payment.
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TechNinja
Thanks everyone for the helpful responses! I'm going to try to reach SSA to confirm my specific situation, but it sounds like the First Year Monthly Test could really help me. I'll make sure to document my work stoppage date and keep track of any special payments. This community has been so helpful!
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Yara Assad
•Glad we could help! One last tip: when you do reach SSA, ask them to document in their system that you're invoking the First Year Monthly Test. Also request a written explanation of how your benefits will be calculated with this rule applied. Having it in writing will protect you if there are any questions later.
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