Will Social Security count my full 2024 salary if I retire Dec 31 and file for January benefits?
I'm planning to retire on my last day of work 12/31/2024 and am thinking about filing for my Social Security retirement benefits in early December. My start date would be January 2025 (I'll be 63 years and 4 months old then) with first payment coming in February 2025. I'm confused about the earnings test - will SSA make me report my expected earnings for the ENTIRE 2024 year even though I'll be starting benefits in 2025? I earned about $78,000 in 2024 but will have zero income in 2025 except for my pension. Will they reduce my benefits because of my 2024 work? I've tried calling SSA three times but can never get through to a human who can explain this!
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Zara Shah
You're in a good position here! Since your benefits start in January 2025, your 2024 earnings won't affect your Social Security payments at all. The earnings test only applies to earnings in the same year you're receiving benefits. So your $78,000 from 2024 doesn't matter for the earnings test in 2025. In 2025, if you're truly not working at all, you'll get your full benefit amount (minus the reduction for claiming before your Full Retirement Age).
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Sean Flanagan
•Oh that's such a relief! I was worried they'd look back at 2024 since I'm filing in December. My cousin had some benefits withheld and it seemed so complicated. Thank you!
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NebulaNomad
wont they check ur earnings for the prev year tho??? my uncle had to pay back some $$ bc he made too much the year b4
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Luca Ferrari
•No, that's incorrect. The earnings test is based on the calendar year you RECEIVE benefits, not the previous year. Your uncle probably had a different situation - maybe he worked during the year he was already collecting benefits or there was an overpayment situation unrelated to the earnings test. For the original poster, 2024 earnings won't matter for benefits that start in January 2025. Only 2025 earnings would potentially reduce 2025 benefits.
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NebulaNomad
•oh ok maybe thats what happened with him then
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Nia Wilson
Just to make sure we're all on the same page - there are actually TWO different earnings tests that could apply depending on your situation: 1. The annual earnings test for 2025 (which won't be a problem if you're not working) 2. The monthly earnings test that applies ONLY in your first year of retirement For #2, you're allowed to earn more than the monthly limit ($1,880 in 2024, probably around $1,950 in 2025) in the months BEFORE you retire without affecting benefits. Since you're retiring in December 2024 and benefits start January 2025, neither test should affect you. But remember you're still taking benefits early at 63.4, so you'll have a permanent reduction of about 18-19% compared to your full retirement age benefit.
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Sean Flanagan
•Thank you for the detailed explanation! I'm aware of the reduction for claiming early, but my pension covers most of my needs and I'd rather have the SS money now. I just wanted to make sure I wouldn't lose any of it to the earnings test.
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Nia Wilson
•That makes perfect sense. As long as you've done the math and the permanent reduction works for your situation, your plan is solid. And yes, with a January 2025 start date and December 2024 retirement, you shouldn't have any earnings test issues at all.
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Mateo Martinez
I filed for SS right before I retired and had SUCH a nightmare getting through to Social Security to make sure everything was set up correctly. I ended up using a service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in under 20 minutes instead of waiting on hold for hours. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. Totally worth it to get confirmation directly from SSA about your specific situation since these rules can be confusing.
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Aisha Hussain
•does that really work? i can never get thru to SS no matter what time i call
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Mateo Martinez
•Yes, it actually does! I was skeptical too but it connected me right away. The agent I spoke with confirmed everything about my earnings test concerns and even helped me understand exactly when my first payment would arrive.
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Ethan Clark
MY WIFE HAD SOMETHING SIMILAR!!! We both retired same day (june 30 last year) but she started SS in july and i waited till january!! They DEFINITELY didnt count her earnings from jan-june against her but they DID count mine for some reason and i had to call SIX TIMES to get it fixed!!! Make sure you DOUBLE CHECK your first payment!!!
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Zara Shah
•That sounds like an error on SSA's part. If your benefits started in January, your previous year's earnings shouldn't have affected your benefits at all. Good reminder that it's always important to check your benefit amounts carefully and follow up on discrepancies.
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Ethan Clark
•YES IT WAS AN ERROR!!! took forever to fix tho
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Luca Ferrari
One aspect no one has mentioned yet: while your 2024 earnings won't affect the earnings test for your benefits, they WILL be part of your lifetime earnings record and could potentially increase your benefit amount if 2024 is one of your 35 highest earning years. SSA calculates your benefit based on your highest 35 years of indexed earnings, so if 2024 replaces a lower-earning year in that calculation, you might see a small increase in your benefit amount when they do their annual recalculation.
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Sean Flanagan
•That's interesting! I didn't realize they would automatically recalculate. When does that happen? Would I see the increase right away or later?
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Luca Ferrari
•SSA typically does the recalculation in the fall of the following year, once they receive the prior year's earnings from IRS. So your 2024 earnings would likely be incorporated into a recalculation in late 2025, and any increase would be retroactive to January 2025. Usually, you'd receive a letter informing you of any change.
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Aisha Hussain
i thought u cant work AT ALL when getting ss??
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Nia Wilson
•That's a common misconception. You absolutely CAN work while receiving Social Security retirement benefits. If you're below your Full Retirement Age (FRA), your benefits might be reduced if you earn above certain limits (the earnings test). Once you reach your FRA, there's no reduction in benefits regardless of how much you earn from working.
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Sean Flanagan
Thank you everyone for the helpful responses! Just to summarize what I've learned: 1. My 2024 earnings won't affect my benefits starting in January 2025 2. Since I'm not working in 2025, I won't have any earnings test issues 3. I understand I'm taking a permanent reduction by claiming at 63.4 4. My 2024 earnings might actually increase my benefit slightly when SSA recalculates I think I'm good to proceed with filing in early December for my January start date. Really appreciate all the advice!
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Zara Shah
•Perfect summary! Good luck with your retirement!
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