Will my pre-retirement income count toward Social Security earnings limit if I start benefits at FRA?

Good news! Since you'll be at your Full Retirement Age (FRA) when you start collecting benefits, the earnings limit doesn't apply to you at all. The $23,000 limit (actually $24,720 for 2025) only applies to people who collect Social Security BEFORE reaching their FRA. Once you hit FRA, you can earn unlimited income without any reduction to your Social Security benefits. So all your pre-retirement income including salary, vacation payout, and sick time won't affect your benefits. Just make sure you really are at your FRA when you start collecting. If you apply even a month before reaching FRA, different rules would apply for that year.

actually the earnings limit is a bit more complicated. it depends on the MONTH you reach FRA not just the year. and it might matter what month you actually get those payouts for vacation/sick time. my brother had issue with this so be careful!!

I WENT THROUGH EXACTLY THIS LAST YEAR!! The SSA rep gave me the WRONG information and caused me so much stress!!! They told me my vacation payout would count against me but IT DOESN'T if you're already at FRA!!! The whole earnings limit thing is a COMPLETE NIGHTMARE to understand and the SSA doesn't make it any easier!!! My advice: document EVERYTHING, get names of who you talk to, and don't trust what one person tells you - always verify with someone else there!!!

When I was trying to figure this out for my retirement, I spent WEEKS trying to get through to SSA. Ended up using a service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in under 10 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent confirmed exactly what others are saying here - once you're at FRA, you can earn unlimited income without affecting your benefits. The earnings test simply doesn't apply. It would only matter if you started benefits before reaching your FRA in June.

i think everyone is forgetting that theres also the issue of how social security is taxed which is different from the earnings limit. if your combined income (including half of SS benefits + other income) exceeds $34,000 (married) or $25,000 (single) up to 85% of your benefits could be taxable. so those payouts might push you into higher tax bracket for SS benefits.

My wife dealt with this same thing in 2023. All the income she earned before starting SS didn't matter for the earnings test since she was past FRA when she filed. Just make sure you apply for benefits AFTER you reach FRA so there's no confusion. Good luck with your retirement!

Thanks everyone for the helpful responses! This really clears things up. I'm definitely going to wait until August to apply, well after I reach my FRA in June. And I'll look into the tax implications of those payouts too - that's something I hadn't considered. Is there anything special I need to do when I apply to make sure SSA understands my situation correctly? I've heard their representatives sometimes give inconsistent information.

forgot to say congrats on retirement! i'm still 3 years away and counting down the days lol

One thing to keep in mind - when you do apply for Social Security, you might want to consider doing it online through ssa.gov rather than trying to call. The online application is available 24/7 and you can save your progress if you need to step away. It also automatically calculates your benefit amount and lets you choose your start date. Since you're waiting until August to start benefits (smart move!), you can actually apply up to 4 months in advance. So you could submit your application as early as April 2025 and specify August as your benefit start date. This gives SSA time to process everything and reduces the chance of any delays in your first payment. Also, make sure you have your tax returns from the last couple years handy when you apply - sometimes they ask for income verification even though the earnings test won't apply to you.

Just wanted to add another resource that might help - the SSA's Publication 05-10069 "How Work Affects Your Benefits" has a really clear breakdown of the earnings test rules. You can download it from their website or request a paper copy. What's particularly helpful is that it has specific examples of different scenarios, including people who retire mid-year like you're doing. Since you'll be past FRA when you start benefits, you're in the "no earnings test applies" category, but the publication explains exactly why and how SSA makes that determination. Also, once you do start receiving benefits, you'll get an annual statement showing exactly how much you received and any tax withholding. This makes tax time much easier when dealing with those vacation/sick payouts from earlier in the year that others mentioned.

I went through a very similar situation when I retired in 2022. Like you, I was worried about how my final salary payments and vacation payout would affect my Social Security benefits. The key thing that gave me peace of mind was getting everything in writing from SSA. When I applied online (which I highly recommend), I made sure to clearly document in the remarks section that I would be past my FRA when benefits began. I also kept copies of all my final pay stubs and vacation payout documentation, even though it turned out I didn't need them since the earnings test doesn't apply once you're at FRA. One small tip - if you're planning to have taxes withheld from your Social Security benefits to help with the tax situation others mentioned, you can set that up when you apply using Form W-4V. It might be worth considering given your vacation and sick leave payouts will likely bump up your income for 2025. Congratulations on reaching this milestone! The transition to retirement is exciting even if the paperwork feels overwhelming.