Will my $19k monthly income from rental property and business affect my Social Security if I claim at 63?

I went through EXACTLY this calculation last year! The rental income is generally NOT counted toward the earnings test limit - it's considered unearned income (passive). Only your business income would count against the earnings limit. For 2025, if you're under FRA for the whole year, SSA will deduct $1 from your benefits for every $2 you earn above $22,320. With your business making about $108k annually, you'd be WAY over that limit and would probably have all your benefits withheld. Personally, I found a service called Claimyr (claimyr.com) that got me through to a real SSA agent in about 10 minutes to confirm all this when I was trying to figure out my situation. I spent WEEKS trying to get through on my own before that. They have a video that shows how it works: https://youtu.be/Z-BRbJw3puU. The agent I talked to went through my specific income sources and explained exactly how the earnings test would apply to me.

There's some key information you should understand about claiming early. Rental income is NOT counted toward the earnings test limit because it's considered unearned/passive income. However, your business income DOES count and would likely result in most or all of your benefits being withheld due to the earnings test. More importantly, claiming at 63 means a permanent reduction of about 25% from your full retirement age benefit amount. Given your income level, you might be better served financially by waiting until your FRA (Full Retirement Age) when the earnings test no longer applies, or even until 70 when your benefit would be 77% higher than at age 63. If you have sufficient income now, delaying benefits gives you a guaranteed increase of approximately 8% per year in your monthly benefit amount.

I retired at 64 and was in similar situation but with less income than u. Big mistake claiming early!! I had $5k/mo rental income and small business income about $4k/month. They withheld almost all my SS checks and I STILL took a permanent reduction!!! Wish I waited till FRA. Social security is super complicated, I thought I understood it but didn't. The rental income is fine but the business income kills you with the earnings test.

Your total monthly income is $19,000, which equals $228,000 annually. The 2025 earnings limit for someone under FRA is $22,320. Since only your business income of $108,000 counts toward this limit, you would be $85,680 over the threshold. The SSA withholds $1 for every $2 over the limit, so approximately $42,840 would be withheld from your annual benefit. Unless your Social Security benefit would be more than $3,570 monthly (which is unlikely), all your benefits would be withheld. Additionally, you'd still be taking a permanent 25% reduction by claiming at 63 instead of your FRA. From a purely financial perspective, with your current income levels, waiting until at least your FRA would likely be more advantageous. At FRA, there is no earnings test, and if you wait until 70, you'll receive delayed retirement credits of 8% per year.

To answer the question about recalculation: Yes, the SSA does make an adjustment once you reach FRA for benefits withheld due to the earnings test. However, this doesn't eliminate the permanent reduction for claiming early. Here's how it works: If you claim at 63 but have benefits withheld due to high earnings, when you reach your FRA, the SSA will adjust your monthly benefit to account for the months when benefits were completely withheld. This results in a slightly higher monthly payment than your initial reduced amount, but still less than if you had waited until FRA to claim initially. The critical point is that this adjustment only helps recover from complete months of withheld benefits, not the early claiming reduction itself.

I'm in a similar boat but 64 and with much less rental income. I talked to an SSA rep last week actually (after like 5 tries getting through their phone system!) and she confirmed the business income vs rental income distinction. But here's something NO ONE mentioned yet - if you're running your own business, the SSA counts your ENTIRE NET PROFIT as earnings, not just your salary/draw. So if your business shows $9k/month in profits on Schedule C or your business tax return, ALL of that counts against the earnings test, even if you're not personally taking all of that as income. Also, be careful about how you structure things. If you're actively managing those rental properties and report the income as self-employment income rather than passive income, it COULD count against the earnings test. The distinction matters.

wait till 70 if u can!! my husband gets almost TWICE what i get cause he waited and i took mine at 63!!! biggest mistake ever

Has anyone tried using the SSA calculators? I found them really confusing when trying to figure out the same thing last year. The retirement calculator doesn't seem to factor in the earnings test properly, or maybe I was doing something wrong?

Thanks everyone for the helpful responses! Based on what you're all saying, it sounds like I'd be making a big mistake by claiming now. With my business income well over the limit, I'd get little to nothing now BUT still take that permanent 25% reduction. I think I'm going to wait at least until my FRA when the earnings test goes away, maybe even until 70 for the maximum benefit. Does anyone know if I need to do anything special regarding my investments or business structure in preparation for eventually claiming SS benefits? Or is it just a matter of waiting until the right time to apply?

Smart move deciding to wait! I'm 65 and went through this exact analysis two years ago. One thing to add - since you're actively running a landscape business, you might want to consider gradually transitioning some of the day-to-day operations to employees or subcontractors as you get closer to your claiming strategy. This could help reduce your Schedule C net profit (which counts toward the earnings test) while still maintaining ownership income. Also, double-check that your rental properties are properly classified as passive income on your tax returns. If you're doing significant property management work yourself (more than material participation), the IRS might classify some of that as active business income, which would then count against the SS earnings test. I ended up creating a 5-year plan to gradually reduce my active business income while keeping my investment income steady. It's working out well so far!

One thing I haven't seen mentioned yet is the potential tax implications of your decision. With $19k monthly income, you're likely in a higher tax bracket now than you might be in retirement. Social Security benefits can be taxable (up to 85% of benefits for higher earners), so claiming later when you might have lower overall income could actually be more tax-efficient. Also, consider that if you're still actively working and earning at this level, you probably don't NEED the Social Security income right now for living expenses. The "guaranteed" 8% annual increase from delayed retirement credits until age 70 is pretty hard to beat in today's investment environment, especially with no risk. I'd suggest running the numbers with a fee-only financial planner who can model different scenarios including the tax implications. Sometimes the break-even point for waiting vs. claiming early is much longer than people realize when you factor in taxes and investment opportunity costs.