Will bonus payment after retirement affect my SS benefits if I'm under FRA?
I retired on January 31, 2025 and started collecting Social Security immediately (I'm 64, so below my full retirement age). My company just informed me that I earned a performance bonus of $9,200 for work I did in 2024, but they won't pay it out until next month. I'm worried this will count against my earnings limit for 2025 and cause problems with my benefits. The bonus was 100% earned before I retired, but is being paid after I started receiving Social Security. Will this trigger the earnings test? Do I need to report it to SSA? I'm already stressed about staying under the annual limit ($22,750 I think) since I'm doing some part-time consulting work too.
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GalaxyGazer
This is actually a tricky situation with SS earnings test rules. What matters is WHEN you receive the income, not when you earned it. Since you're getting paid in 2025, it will count toward your 2025 earnings limit even though you earned it in 2024. The $9,200 bonus plus your consulting income will be counted against your annual limit, and if you go over, SSA will withhold $1 in benefits for every $2 you earn above the limit.
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Amina Sow
•Oh no! That's what I was afraid of. So I have to stay under $22,750 TOTAL for both the bonus and my consulting work combined? I was planning to make about $18,000 consulting this year, so with the bonus I'll be over the limit. How exactly does the withholding work? Will they just stop my payments at some point?
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Oliver Wagner
happened to my husband!!! he got a bonus in March but retired in January and SSA took back some of his benefits. soooooo frustrating because the $ was for work he did BEFORE he started ss. but they don't care when u earned it only when u got PAID.
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Amina Sow
•That's really unfair! Did they just reduce his monthly payment amount or did they make him pay back money in a lump sum? I'm trying to prepare for what's coming...
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Natasha Kuznetsova
The previous responses are correct. For Social Security earnings test purposes, income counts when it's received, not when it's earned. So your $9,200 bonus will count toward your 2025 earnings limit of $22,750 (the limit for beneficiaries under FRA in 2025). If your total earnings exceed the limit: 1. SSA will withhold $1 in benefits for every $2 above the limit 2. For your situation, if you earn $18,000 consulting plus $9,200 bonus = $27,200 total 3. That's $4,450 over the limit, so SSA would withhold approximately $2,225 in benefits SSA doesn't usually demand immediate repayment. Instead, they'll reduce or suspend your monthly benefits in 2026 until the withholding amount is satisfied. And remember, any benefits withheld aren't lost forever - they're factored back into your benefit calculation when you reach your Full Retirement Age.
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Javier Mendoza
•This is RIDICULOUS! The govt is essentially penalizing you for your hard work from the previous year. Why should it matter when the employer decides to pay out? This is ANOTHER example of how the SSA rules are designed to confuse and frustrate hard-working Americans. I went through something similar and spent HOURS on the phone trying to get a straight answer!
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Emma Thompson
I just wanna say my sister had almost the same thing happen. She had to report it on her annual earnings report to Social Security. They sent her a letter later saying they were adjusting her benefits. Good luck!
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GalaxyGazer
•Yes, good point about the reporting requirement. You can either report this proactively by calling SSA, or wait until they send the annual earnings reporting form. But you definitely don't want to ignore it, as that could lead to an overpayment situation later.
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Malik Davis
Maybe try calling the ssa directly about your situation???? I spent 3 days trying to get through to them last month about my benefit amount being wrong. kept getting disconnected after waiting for over 2 hours each time. So frustrating!!!
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Isabella Santos
•I had the same terrible experience trying to reach SSA about an overpayment notice. After multiple disconnections and hours of waiting, I found a service called Claimyr (claimyr.com) that actually got me connected to an agent in under 10 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU - it saved me from pulling my hair out! Especially for complex situations like yours with the bonus payment timing, speaking to an actual agent is really the best way to get clear guidance.
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Amina Sow
Thanks everyone for the helpful responses. Looks like I'll have to deal with a benefit reduction next year because of this bonus. It's frustrating since I did the work last year, but at least now I can prepare financially. I'll try reaching SSA to confirm everything and maybe use that Claimyr service since it sounds like getting through is a nightmare. One more question - do I need to do anything right now, or just wait until it's time to report my annual earnings?
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Natasha Kuznetsova
•You don't need to take immediate action. When you receive the bonus, keep documentation showing when it was paid and that it was for work performed in 2024. This won't change how SSA treats it, but it's good to have clear records. Then you have two options: 1. Proactively report it when received by calling SSA 2. Include it on your annual earnings report Option 2 is simpler, but it means you might have a larger adjustment later. Option 1 might allow SSA to adjust your benefits more gradually through the year. Also, remember to keep track of your consulting income throughout the year so you know where you stand relative to the limit. And remember that the month you reach your FRA, the earnings test no longer applies for that month and beyond.
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Oliver Wagner
one thing nobody mentioned is you get the money back eventually!!! when you hit your FRA they recalculate your benefit and give you credit for all the months they took away. at least that's what the guy told my husband. doesn't help now but at least its not gone forever.
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Amina Sow
•That's actually really helpful to know! Makes me feel a bit better about the whole situation. Thank you!
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