Will my 2024 income affect my Social Security retirement benefits starting in 2025?
I just submitted my retirement paperwork and plan to start collecting Social Security next month. I'm worried about how my income from last year might impact my benefit amount. I earned around $86,000 in 2024 from my job (retired in December), plus had about $12,000 in investment income. Will the SSA look at this when calculating my monthly payment? I thought they only looked at your highest 35 years, but someone at work told me recent income can reduce my benefits. I'm 66 and 4 months, which I think is my full retirement age. Any help understanding this would be greatly appreciated!
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CosmicCommander
Your coworker is confusing two different things. Since you're at your Full Retirement Age (FRA), your 2024 income won't reduce your benefits. The earnings test that reduces benefits only applies to people collecting before their FRA. What WILL happen is that your 2024 earnings might increase your benefit amount if it was one of your highest 35 years of earnings. SSA automatically recalculates your benefit annually to include new higher earning years.
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Amara Okafor
•That's a relief! So there's actually a chance my benefit might go up because of last year's income? How long does it usually take for them to do that recalculation?
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Giovanni Colombo
my brother thought the same thing when he retired!! but they only dock ur benefits if ur under full retirement age and still working. once u hit FRA ur good to make whatever u want with no penalty
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Amara Okafor
•Thanks! That makes me feel better. I was worried I'd miscalculated something important.
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Fatima Al-Qasimi
I've been fighting with Social Security for THREE MONTHS over this exact issue!! They incorrectly applied the earnings limit to my benefits even though I'm past my full retirement age. Every time I call, I get a different answer and then get disconnected after waiting for HOURS. Their system is completely broken! Make sure you check your first payment carefully - they make mistakes ALL THE TIME and then it's YOUR problem to fix it.
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Dylan Cooper
•I had the same issue and finally got through to a competent agent using Claimyr (claimyr.com). Their service gets you past the hold times and actually connects you to a live agent. There's a demo video at https://youtu.be/Z-BRbJw3puU showing how it works. Once I got through to an actual person, they fixed the earnings test issue in about 15 minutes. Totally worth it to avoid the endless hold music and disconnects!
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Sofia Ramirez
Wait i'm confused... doe's this mean I can work part time after I retire and still get full socal security? I thought they took away some of your benefit if you earned to much money??
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CosmicCommander
•It depends on your age. If you're under your Full Retirement Age (FRA), then yes, they reduce your benefits if you earn over certain limits ($22,320 in 2025). But once you reach your FRA, you can earn unlimited income with no reduction in benefits. The OP is already at their FRA, so no reduction applies.
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Dmitry Volkov
My situation was similar to yours when I retired last year. The only way your previous year's income matters is for taxation of your Social Security benefits. If your combined income (adjusted gross income + nontaxable interest + half of SS benefits) exceeds $25,000 (single) or $32,000 (married filing jointly), up to 85% of your benefits might be taxable. With your investment income on top of your SS benefits, you'll likely pay some tax on your benefits.
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Amara Okafor
•I hadn't even thought about the tax implications! Thanks for pointing that out. I'll need to budget for that since it sounds like I'll definitely be paying some taxes on my SS benefits.
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StarSeeker
congrats on retirement!! i just hit my FRA last month too!! 🎉🎉 isnt it the best feeling?? enjoy those benefits, you earned them!!
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Amara Okafor
•Thank you! Yes, it feels great after working for over 40 years. Congratulations to you too!
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CosmicCommander
One more thing to be aware of - if you're enrolled in Medicare, your Part B premium is based on your income from 2 years ago (so your 2023 income determines your 2025 premium). This is called IRMAA (Income-Related Monthly Adjustment Amount). With your income level, you might pay a slightly higher premium than the standard amount. This has nothing to do with your actual Social Security benefit calculation though.
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Amara Okafor
•Oh! That's really good to know. I am enrolled in Medicare. I'll look into this IRMAA thing - I had no idea the premiums could vary based on income from two years ago.
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Fatima Al-Qasimi
When I started collecting last year, I had to wait almost 3 months for my first payment! They backpaid me eventually, but just warning you it might not start next month like you expect. The SSA is EXTREMELY backed up right now.
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Giovanni Colombo
•same here!!! took forever to get my first check. they backdated it but still super annoying to wait
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