Will earnings from January-September count against SS income limit if retiring October 2025?
I'm planning to apply for Social Security retirement benefits starting October 2025 when I'll be 65 (still below my FRA of 67). I understand there's an earnings limit of $23,400 for 2025 for people under FRA. My question is about timing: If I earn $45,000 between January-September 2025, then stop working completely before I start collecting in October, will those pre-retirement earnings count against my limit and reduce my first payment in November? Or does the earnings test only apply to income earned AFTER I start receiving benefits? I've heard conflicting information from friends and don't want to be surprised with a reduced check. Thanks for any clarity!
19 comments
Join the conversation
Liv Park
the limit only applies to what u earn while GETTING benefits, not before. so ur January-September income wont matter for ur benefits starting in October
0 coins
Charlee Coleman
•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!
0 coins
Leeann Blackstein
The previous response isn't entirely accurate. For the calendar year you first retire, Social Security applies a monthly earnings test rather than the annual test. For 2025, that monthly limit would be $1,950 ($23,400 ÷ 12). For October through December, you would need to stay under that monthly amount to receive full benefits for those months. Your January-September earnings won't matter as long as you have a legitimate retirement in October. Just make sure you don't earn over $1,950 in any month for the remainder of 2025 after you start collecting.
0 coins
Charlee Coleman
•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?
0 coins
Leeann Blackstein
•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.
0 coins
Ryder Greene
I was in almost EXACTLY your situation last year!!! I retired in September at 65, my FRA is also 67. Had earned like $52K from Jan-Sept. When I applied for benefits, the SSA rep explained they use the "grace year" rule where they only look at monthly earnings after you start benefits. As long as you're REALLY retired (not just saying it but still working), your Jan-Sept earnings won't affect anything. Good luck!!
0 coins
Charlee Coleman
•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?
0 coins
Ryder Greene
•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!
0 coins
Carmella Fromis
I don't want to confuse things, but are you sure the earnings limit will be $23,400 for 2025? I thought they hadn't announced the 2025 limits yet since they're based on the COLA which comes out in October? I'm also planning my retirement and trying to calculate everything precisely.
0 coins
Theodore Nelson
•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.
0 coins
AaliyahAli
I went through this exact situation. The most important thing to understand is the difference between the annual earnings test and the monthly earnings test. In the year you retire mid-year, you qualify for the monthly test, which is much more favorable in your situation. Here's what you need to know: 1. For months BEFORE you're entitled to benefits (Jan-Sept 2025), your earnings don't matter 2. For months AFTER you're entitled (Oct-Dec 2025), you'll need to stay under the monthly limit (about $1,950) for each individual month 3. Make sure to tell SSA you're retiring when you apply - this ensures they apply the monthly test 4. Keep documentation of your last day of work This is called the "grace year" provision and it's specifically designed for situations like yours. As long as you have a clean retirement in October, those earlier earnings won't reduce your benefits.
0 coins
Charlee Coleman
•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?
0 coins
AaliyahAli
•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.
0 coins
Ellie Simpson
Has anyone tried calling the SSA directly about this? When I had a similar question last year I spent DAYS trying to get through to someone. Kept getting disconnected or waiting for hours. So frustrating!
0 coins
Theodore Nelson
•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.
0 coins
Ellie Simpson
•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 😫
0 coins
Carmella Fromis
I think everyone is overlooking something important here - the earnings limit is different in the year you reach Full Retirement Age! Isn't there a higher limit that applies for the months in the year you reach FRA?
0 coins
Leeann Blackstein
•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.
0 coins
Carmella Fromis
•Oh I see! Thanks for clearing that up. So the higher limit would only apply in 2027 for them. I misunderstood how that worked.
0 coins