Will earnings from January-September count against SS income limit if retiring October 2025?

That's a relief! So just to be 100% clear - even though I'll go over the annual threshold before October, it won't affect my payments as long as I have $0 income after I start collecting? Thank you!

Thank you for that detailed explanation! I hadn't heard about the monthly test. I do plan to completely stop working in October, so it sounds like I should be fine. One more question - does my employer's final payout of unused vacation time count toward October's earnings if they pay it out after my last day?

Great question about vacation payout. Social Security counts income when it's earned, not when it's paid. Since you earned that vacation time during your working months, it should not count toward October's earnings even if paid after you retire. But it would be smart to verify this with SSA directly for your specific situation.

That's so helpful to hear from someone who's been through it! Did they ask for any specific documentation to prove you had actually retired? Or did they just verify it through your earnings record later?

They didn't ask for any special retirement proof when I applied, but I did have to provide estimate of my earnings for the year. I think they verify later through payroll tax reporting. Just be honest about your last day worked and you'll be fine!

You're right that the official 2025 amount hasn't been announced yet. The $23,400 is likely an estimate based on typical annual increases. The 2024 limit is $22,320, so $23,400 is a reasonable projection, but the official number won't be known until October 2024 when they announce the COLA for 2025.

This is incredibly helpful, thank you! I'll make sure to specify I'm retiring when I apply. Do you recommend applying a few months before October to ensure everything is processed in time for my first payment?

Yes, I'd recommend applying about 3 months before you want benefits to begin. So around July 2025 would be ideal for an October start date. This gives SSA time to process everything. You can apply online at ssa.gov or schedule an appointment at your local office.

I had the same experience trying to call about my SSDI review. After multiple disconnections and hours on hold, I finally used Claimyr.com to get through. They connect you with SSA without the wait time. Saved me hours of frustration. There's a video showing how it works at https://youtu.be/Z-BRbJw3puU. Much easier than the regular SSA phone system.

I've never heard of that service before! Will definitely check it out. Anything's better than listening to that hold music for 3 hours just to get disconnected right when they finally answer 😫

You're confusing two different scenarios. The higher earnings limit (which is $59,520 for 2024) only applies in the calendar year you actually reach your FRA, and only for the months before your FRA month. Since the original poster won't reach their FRA (67) until 2027, they'll be subject to the regular under-FRA limit for all of 2025. The monthly grace year provision is what applies in their situation.

Oh I see! Thanks for clearing that up. So the higher limit would only apply in 2027 for them. I misunderstood how that worked.

That's really practical advice about getting written confirmation from HR! I hadn't thought about documenting my retirement date officially. Since you mentioned consulting work - what if I occasionally help out former colleagues with questions after I retire but don't get paid for it? Would that be considered work even if there's no compensation? Also, do you know if there's a specific form or letter format that employers typically use for retirement documentation that SSA prefers?

Great question about unpaid help! Generally, Social Security only counts paid work toward the earnings test, so answering occasional questions for free shouldn't be an issue. However, if you're doing substantial unpaid work that could be considered "services" in a business context, SSA might still consider it work activity. As for documentation, there's no specific SSA form, but a simple letter on company letterhead stating your retirement date, last day worked, and final pay date is usually sufficient. Some companies include final vacation payout details too. The key is having something official that clearly establishes when your employment relationship ended. Keep a copy for your records!

Great questions about the nuances of retirement! From what I understand, SSA generally looks at whether you're in "substantial gainful activity" rather than just any work at all. Board positions can be tricky - if they're truly honorary or minimal time commitment with small compensation, they might not count. But if you're actively managing a business as a board member, that could be considered work. For stock options and deferred comp, the key is usually when the income was "earned" versus when it's "received." If the options vested based on your past service, they typically shouldn't count toward current earnings limits. But if there are ongoing service requirements or performance metrics tied to your continued involvement, that's different. I'd definitely recommend getting clarity from SSA on your specific situation before finalizing retirement plans. The grace year is helpful, but you're right that there can be gotchas with different types of compensation and ongoing relationships with former employers.

Thank you for sharing that direct experience with calling SSA! It's really reassuring to hear confirmation from an actual representative about the monthly test for retirement year. The point about "bona fide retirement" is important - I'm definitely planning to completely stop working, no part-time or consulting at all. Good tip about being ready to estimate remaining year earnings when applying. Did the rep give you any guidance on how precise that estimate needs to be? I'm assuming they understand it's just an estimate since you can't predict exactly what might happen, but I want to be as accurate as possible to avoid any issues later.

She said the estimate doesn't need to be perfect - they understand it's a projection. The key is being reasonable and honest about your expectations. If you're truly retiring with $0 income planned for the rest of the year, that's your estimate. She mentioned that many people overestimate just to be safe, which is fine. The important thing is reporting any actual changes if your situation changes after you apply. For example, if you estimated $0 but then decided to do some small consulting work, you'd need to report that right away through your online account or by calling.

You're absolutely right to make that distinction! The early retirement reduction and the earnings test are completely separate issues. The early retirement reduction (which would be about 13.3% for retiring 2 years before your FRA of 67) is permanent and applies regardless of the earnings test. So yes, even if you perfectly navigate the earnings test and have no benefit reductions from excess earnings, you'll still have that permanent early retirement penalty on your monthly benefit amount. It's good that you're factoring both into your planning - the earnings test affects whether you receive benefits in the short term, while the early retirement reduction affects how much you'll receive for life. Some people find it helpful to run the numbers on whether it makes sense to work a bit longer to avoid or reduce that permanent penalty, but that's a personal financial decision based on your individual circumstances.