Will Social Security deduct $1 for every $2 earned before reaching FRA in mid-2025?
I'm turning 66 and 10 months (my FRA) in July 2025, but I plan to start collecting Social Security retirement benefits in January 2025. I'm still working part-time and will earn about $28,000 from January through June. Will Social Security apply the earnings limit and deduct $1 for every $2 I earn over the limit during those months before I reach FRA? Or does the fact that I reach FRA later in the same year change how they calculate the deductions? I'm trying to figure out if I should just wait until July to file or if there's some exception I don't know about. Thanks for any advice!
20 comments
Join the conversation
Jessica Nguyen
Yes, they will apply the earnings test for the months before you reach your FRA. For 2025, they'll take $1 for every $2 you earn above the annual limit (which should be around $22,000-23,000 in 2025) UNTIL the month you reach FRA. After that, there's no limit on your earnings. Since you're reaching FRA in July, they'll only count your earnings from January through June against the limit. If you'll earn $28,000 in those six months, you'll probably be about $5,000-6,000 over the limit, meaning they'd withhold approximately $2,500-3,000 from your benefits during those months.
0 coins
Cameron Black
•Thanks for explaining! So they'd spread those withholdings across my first 6 months of benefits? Would I get those withheld amounts back later or are they gone forever?
0 coins
Isaiah Thompson
Are you sure you actually want to claim 6 months before FRA? You'll be hit with a permanent reduction of about 3.3% in your monthly benefit amount (roughly 0.56% per month). Plus dealing with the earnings test headache. Unless you really need the money now, waiting until your FRA in July might make more financial sense - you'd get your full benefit amount and no earnings limit to worry about.
0 coins
Cameron Black
•That's a good point I hadn't fully considered. I was focusing so much on the earnings test that I forgot about the permanent reduction. I'll have to do the math and see if claiming early is worth it in my situation.
0 coins
Ruby Garcia
i had this same issue last year. my FRA was in october but i started benefits in march. SSA took almost all my benefits for the first few months bcause i was still working full time. but then they stopped taking anything after i hit FRA. call them DIRECTLY to ask how much they'll take in your specific situation. its hard to get thru their phone lines tho
0 coins
Alexander Evans
•I've been calling SSA for THREE DAYS trying to ask a similar question! Every time I wait 2+ hours and then get disconnected. It's INFURIATING that they can't hire enough people to answer the phones. How did you manage to get through?
0 coins
Evelyn Martinez
After struggling with the same issue of not being able to reach SSA by phone, I found a service called Claimyr that helped me get through to a Social Security agent without the ridiculous wait. You can see how it works at https://youtu.be/Z-BRbJw3puU - it basically holds your place in line and calls you when an agent is available. I used it when I needed to discuss my earnings limit situation which was similar to yours, and it saved me so much frustration. Their website is claimyr.com if you're interested.
0 coins
Alexander Evans
•Thank you for this! I'm going to try it tomorrow. If it gets me through to an actual person I'll be eternally grateful.
0 coins
Benjamin Carter
Something else to consider: they use a higher earnings limit in the year you reach FRA. For months before your FRA in your FRA year, the 2024 limit is $59,520 (and it'll likely be higher for 2025). They only take $1 for every $3 you go over THAT limit in the months of your FRA year before you reach FRA. Very different from the regular limit!!! Look it up on ssa.gov - might change your whole calculation.
0 coins
Maya Lewis
•That's not quite right. There are TWO different earnings tests. The regular one (about $22,000 in 2024) applies to years BEFORE your FRA year - so if you're not reaching FRA until 2025, the regular limit applies for all of 2024. The higher limit you mentioned (about $59,520 for 2024) ONLY applies during the YEAR you reach FRA, but only for months BEFORE your FRA month. And yes, for that special period it's $1 withheld for every $3 over the limit, not $1 for every $2. The original poster is asking about the months before their FRA in their FRA year, so the higher limit with the 1-for-3 reduction would apply to them.
0 coins
Cameron Black
Wow, I'm confused now! So is it the higher limit ($59,520+ for 2025) with the 1-for-3 reduction that would apply to me from January-June 2025? If so, I'd be well under that limit with my $28,000 planned earnings and wouldn't face any reduction at all?
0 coins
Jessica Nguyen
•Yes, that's correct. Since 2025 is your FRA year, the special higher limit applies to the months before you reach FRA (January-June 2025). With planned earnings of $28,000 during those months, you'd be well under the special limit (which will likely be over $60,000 for 2025), so you wouldn't face any benefit reductions due to earnings. However, you'd still have the permanent reduction to your benefit amount for claiming 6 months early - approximately 3.3% less for life. That's the trade-off you need to consider.
0 coins
Ruby Garcia
this all depends on if ur talking bout regular SS retirement or disability!! if ur on disability the rules r completely different!!
0 coins
Cameron Black
•I'm talking about regular retirement benefits, not disability. Sorry if that wasn't clear!
0 coins
Isaiah Thompson
If your earnings will be under the higher FRA-year limit, the main question becomes whether claiming 6 months early is worth the permanent reduction. Here's some quick math: - If your full retirement age benefit would be $2,000/month - Filing 6 months early would reduce it by about 3.3% to $1,934/month - That's $66 less every month for the rest of your life - Plus, you'd get 6 extra months of payments (roughly $11,604 total before any deductions) The breakeven point where waiting becomes better is about 14-15 years. If you expect to live longer than that, waiting until FRA would give you more lifetime benefits.
0 coins
Benjamin Carter
•But don't forget that if you're still working, those extra earnings could increase your benefit calculation! Sometimes working longer can bump up your PIA if those earnings replace lower earnings in your 35-year calculation.
0 coins
Isaac Wright
my sister started hers 3 months b4 her FRA and regrets it so much now! shes 73 and that reduction adds up over time. just wait the 6 months if u can afford to
0 coins
Cameron Black
•Thanks for sharing your sister's experience. I'm leaning toward waiting now that I understand the trade-offs better.
0 coins
Maya Lewis
One important thing everyone's missing: if you do claim early and lose some benefits to the earnings test, Social Security will recalculate your benefit when you reach FRA to give you credit for the months they withheld benefits. This partially offsets the reduction for claiming early. For example, if you claimed 6 months early but lost 2 months to the earnings test, at FRA they would recalculate your benefit as if you'd only claimed 4 months early. It doesn't make you whole, but it helps.
0 coins
Cameron Black
•That's really helpful information! I didn't know they did that recalculation. Based on all the advice here, I think I'll just wait until July to avoid all these complications. I appreciate everyone's help in understanding this complex issue!
0 coins