Will Social Security penalize me for working above monthly limit in first collection month but under annual limit?

Yes, this is a classic situation with the earnings test! For the first year you claim benefits, SSA applies the monthly earnings test for any month in that year where you're entitled to benefits. So if you earn more than $1,950 in June, you won't receive benefits for that month, even though your annual earnings will be under the yearly limit. Starting in 2026, they'll only apply the annual test. So you have a few options: 1. Delay claiming until July after your high-earning month 2. See if your employer can shift some of that June income to May 3. Claim in June but accept you'll likely lose that month's payment

i had the EXACT same issue last year when i retired!! the SSA actually withheld my first TWO checks because i went over the monthly limit both months. then when i called to ask why my payments weren't coming through nobody could tell me for like 3 weeks. so frustrating!!!!!

The SSA applies different rules depending on which year we're talking about: - In your first year receiving benefits, they use the monthly earnings test as mentioned above - In subsequent years, they only look at your annual earnings One important detail: the earnings test only counts wages earned as an employee or net earnings from self-employment. Investments, pensions, other government benefits, etc. don't count toward the limit. Also, if some benefits are withheld due to the earnings test, you'll get credit for those months when you reach Full Retirement Age. Your benefit amount will increase to account for the months you didn't receive benefits.

To add to the good advice already shared, this monthly earnings test can be really tricky! I went through this last year and discovered you need to be proactive with reporting your expected earnings to SSA. Don't wait for them to figure it out. I'd recommend calling SSA directly to discuss your specific situation, but we all know how impossible that can be! I kept getting busy signals and disconnects for weeks until I tried Claimyr (claimyr.com). It got me through to a real agent in under 20 minutes when I'd been trying for days. You can see how it works here: https://youtu.be/Z-BRbJw3puU The agent I spoke with explained exactly how the monthly test would apply in my case and helped me adjust my claiming date to avoid losing benefits. Much better than guessing!

I don't think anyone mentioned this yet but BE CAREFUL about how you report income too!! When I started my benefits last year, I didn't realize the earnings limit is based on GROSS wages, not net after taxes. Made that mistake and had to pay back about $1200 in benefits. The SSA doesn't mess around with this stuff!

I'm confused by all this... so if you make too much in one month you lose benefits forever? That doesnt seem fair at all!

wait so does the monthly test only apply for the first year? so like next year they only look at the yearly total? nobody ever explains this stuff clearly

The STUPID thing is they don't even tell you when they're holding your payment! i had to figure it out myself when the money didn't show up. so annoying! You should defintely postpone filing until after your big project if possible!!!!

Thanks everyone for the advice! I'm going to try three things: 1. Talk to my employer about spreading that project payment across May/June 2. If that doesn't work, I'll delay filing until July 3. I'll definitely call SSA to confirm my plan using that phone service someone mentioned It's frustrating how complicated this all is, but I really appreciate all the help figuring it out!