Will Social Security earnings limit be monthly or yearly after starting benefits before FRA?
I started collecting Social Security retirement benefits in April 2025 at age 64 (my FRA is 67 and 2 months). I was working full-time until March 2025, so I understand I was subject to the monthly earnings test during my first year of benefits. Now I'm thinking about picking up some part-time consulting work next year, but I'm confused about which earnings limit will apply. If I start working part-time in 2026, will I be subject to the annual earnings limit instead of the monthly limit? And if I go over the monthly amount occasionally but stay under the annual total, will I still be penalized? I've been trying to figure this out on the SSA website but keep getting confused by all the different rules.
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Christopher Morgan
You're absolutely right about how this works. Your first calendar year of retirement benefits (2025) uses the monthly earnings test, but starting January 2026, you'll switch to the annual earnings limit until you reach your full retirement age. This means you could earn more in some months and less in others - SSA only cares about the total for the year. Just make sure you don't exceed the annual limit (which will be about $24,000 in 2026 if trends continue), or they'll withhold $1 in benefits for every $2 you earn over that limit. Once you reach your FRA of 67 and 2 months, there's no earnings limit at all.
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Zoey Bianchi
•That's really helpful, thank you! So just to be extra clear - if I make $3,000 in one month next year but only $1,500 in another month, that's totally fine as long as my total for the year stays under that annual limit? The monthly amounts don't matter anymore once I'm in the second year?
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Aurora St.Pierre
i went thru this last yr. Yep monthly test just for first yr after that its yearly til FRA. They dont care how u distribute the earnings just the total. But WATCH OUT they count GROSS earnings not whats deposited so dont forget that part.
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Grace Johnson
•THIS!!! They absolutely mean GROSS earnings before any deductions! This messed me up so bad last year - I thought I was under the limit but forgot about my health insurance and 401k deductions. Ended up having to pay back almost $4,300 in benefits!!! The SSA doesn't joke around with this stuff.
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Jayden Reed
Be very careful with this. The rules are confusing. I was told one thing by an agent over the phone and then when I filed my taxes, it turned out to be completely different. Are you sure you want to go back to work before hitting your full retirement age? The penalty is pretty severe - you lose $1 in benefits for every $2 you earn over the limit. Maybe wait until you hit your FRA and then you can earn whatever you want with no reduction? Just my 2 cents...
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Zoey Bianchi
•I appreciate the advice but financially I need some additional income. I'm trying to balance getting enough work to supplement my SS benefits without losing too much. I just need to make sure I understand these limits correctly so I can plan my work schedule accordingly.
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Nora Brooks
Highly recommend tracking your earnings super carefully if you're going to work while under FRA. The SSA systems often don't catch earnings issues until tax time, and then suddenly you get a letter saying you owe thousands back. Been there, it's not fun! When I needed to contact them about my earnings limit issue last year, I kept getting disconnected after waiting 2+ hours. Finally tried Claimyr.com which got me through to an agent in about 20 minutes - saved my sanity. They have a demo video at https://youtu.be/Z-BRbJw3puU that shows how it works. Worth it when you need to actually talk to someone at SSA about something complicated like earnings limits.
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Eli Wang
•does it really work tho? i tried calling SSA 5 times this month, always get the "we're busy, call back later" message and hangs up on me.
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Nora Brooks
•Yes, it actually does work. I was skeptical too but I was desperate after trying for 3 days straight with no luck. They basically call SSA for you and navigate the phone tree, then connect you once they reach a person. Definitely better than getting hung up on repeatedly or waiting for hours.
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Cassandra Moon
There's one more thing nobody mentioned yet about your earnings limit situation. If some of your benefits get withheld because you exceed the earnings limit before reaching your FRA, the SSA will recalculate your monthly benefit when you reach full retirement age to credit you for those months they withheld benefits. So you'll get some of that money back in the form of a higher monthly payment after you reach 67 and 2 months. It's not a direct refund, but it does help offset some of the reduction. The SSA calls this an "adjustment to the reduction factor."
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Zoey Bianchi
•I had no idea about this! So even if I lose some benefits due to working, I'll eventually get credited for those months? That makes me feel better about working next year. Is there anything I need to do to make sure this adjustment happens, or does SSA do it automatically?
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Cassandra Moon
•The adjustment happens automatically when you reach your FRA, but it's always good to check your benefit amount after you reach 67 and 2 months to make sure it increases. If you don't see the increase, call SSA to check on it. But normally it's all done automatically through their system.
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Eli Wang
Dont forget they count ALL earnings, not just w2 income. If u do consulting work n report it on schedule C that counts 2. Learned that the hard way lol.
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Zoey Bianchi
•Thanks for pointing that out! Yes, my consulting would be 1099 work, so I'll definitely need to track that carefully. Do you know if they count the gross amount before expenses on Schedule C or the net profit after expenses?
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Christopher Morgan
•For self-employment income, Social Security counts your net earnings from self-employment - that's your net profit after deducting business expenses but before deducting self-employment tax. It's basically the amount subject to self-employment tax on your Schedule SE.
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Jayden Reed
My sister went through EXACTLY this. Started benefits at 65, FRA was 67. She reported her earnings every month that first year, then switched to annual reporting. But here's the thing - even with annual reporting, if you STOP working entirely during a year before FRA, you can switch BACK to monthly test for the rest of that year! Most people don't know this! She worked Jan-April 2024, earned almost up to the annual limit, then stopped working and was able to get full benefits for May-Dec by switching back to monthly test since she had zero earnings those months. Something to consider in your planning!
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Zoey Bianchi
•Wow, that's really interesting! So the monthly test can actually work in your favor even after that first year if you stop working mid-year. I'll definitely keep that in mind if I decide to stop the consulting work partway through next year. Thanks for sharing your sister's experience!
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