Will high income before retirement reduce my Social Security benefits in 2025? IRMAA vs benefit amount confusion

Your Social Security retirement benefit amount will NOT be reduced due to high income before retirement. IRMAA only affects your Medicare Part B and D premiums, not your actual SS benefit amount. Your SS benefit is calculated based on your highest 35 years of earnings (adjusted for inflation), so those high-income years will actually HELP your benefit calculation, not hurt it! The only thing that would reduce your benefit is if you file before your Full Retirement Age AND continue working with substantial earnings. Since you're filing at your FRA, the earnings test doesn't apply to you at all. File with confidence - those high earning years were good for your benefit calculation.

CAREFUL!!!! If your still working while collecting benefits they WILL reduce your payment!!! happened to me and I lost almost $400/month because they didnt explain this right. Your benefit does get reduced if your income is over the limit and your under full retirement age!!!

This is something I've been curious about too. I'm retiring next month but had a great income last few years. So the high income years actually HELP the calculation?

Been through this exact situation last year! The good news: your high income years won't reduce your Social Security benefit. Actually, they'll probably increase it since SSA uses your highest 35 years of earnings for the calculation. However, your 2023-2024 income WILL affect your Medicare premiums through IRMAA (Income-Related Monthly Adjustment Amount) when you enroll in Medicare. This is separate from your actual SS benefit amount. One thing to consider: if you're planning to work part-time after claiming, remember there's no earnings limit once you've reached your Full Retirement Age. File whenever you want - those high-income years were good for your benefit!

I tried calling the SSA about something similar and was on hold for HOURS before getting disconnected. So frustrating!!

my cousin works for SSA and says lots of people confuse IRMAA (the medicare premium thing) with the actual SS benefit amount. two totally different things! your benefit is based on your lifetime earnings and those high income years actually HELP not hurt your payment. file away!

Just to add one more important detail - once you reach FRA, the monthly benefit amount is fixed (except for COLA increases) regardless of any work you might do. So even if you decide to go back to work part-time or as a consultant, your SS benefit won't be reduced no matter how much you earn. Your Medicare IRMAA might go up, but that's calculated separately from your SS benefit.

Just want to echo what others have said - you're absolutely safe to file at your FRA! I was in a similar situation last year with high consulting income right before retirement and was terrified SSA would penalize me somehow. Turns out those high-earning years actually boosted my monthly benefit since they replaced some lower-earning years from the 1990s in my calculation. The only "penalty" I face is higher Medicare premiums due to IRMAA, but that's completely separate from the Social Security benefit amount. Your financial advisor should have been clearer about this distinction. IRMAA affects Medicare premiums, not SS benefits. Since you're at FRA and done working, there's literally no downside to filing now. Don't delay unnecessarily like I almost did!

As someone who just went through this exact situation 6 months ago, I can confirm what everyone else is saying - your high income years will NOT reduce your Social Security benefits! I had similar anxiety about filing after having my best earning years right before retirement. What I learned is that Social Security uses a completely different calculation than Medicare IRMAA. Your SS benefit is based on your highest 35 years of indexed earnings, so those $185K years will likely INCREASE your monthly payment by replacing lower-earning years from earlier in your career. The confusion is totally understandable since both programs look at your income, but they use it very differently. IRMAA is just a surcharge on your Medicare premiums based on recent tax returns, while your SS benefit calculation looks at your entire work history. Since you're filing at your FRA and not working anymore, you're in the best possible position - no earnings test, no reduction in benefits, and those high-income years working in your favor. Go ahead and file with confidence!

I completely understand your confusion - this is one of the most common misconceptions about Social Security! The key thing to remember is that your pre-retirement income actually HELPS your Social Security benefit calculation, not hurts it. Social Security uses your highest 35 years of earnings (adjusted for inflation) to calculate your benefit. Those $185,000 years will likely replace some of your lower-earning years from earlier in your career, potentially giving you a higher monthly payment than you would have received otherwise. The IRMAA surcharges you mentioned are completely separate - they only affect your Medicare Part B and Part D premiums, not your actual Social Security benefit amount. It's an unfortunate naming similarity that causes a lot of confusion. Since you're filing at your Full Retirement Age (66) and you've stopped working, there's absolutely no reason to delay. You won't face any earnings test restrictions, and your benefit amount is locked in based on your work history. Those high-income consulting years were actually a gift to your future Social Security payments! I'd recommend going ahead and filing - you've earned those benefits and there's no penalty for having done well financially in your final working years.