Will my reduced Social Security benefit ever increase if I earn less after exceeding the earnings limit?
I started collecting Social Security at 63 (before my FRA of 67) and I'm still working part-time. I understand there's an earnings limit and if I go over it, they'll reduce my monthly benefit. Last year I earned about $3,000 over the limit because I picked up extra shifts, and sure enough, my benefit got reduced. What I'm wondering is - this year my hours are being cut back at work, so I'll probably earn UNDER the limit again. Will SSA automatically restore my original benefit amount? Or once they reduce it because of excess earnings, does it stay reduced forever? I'm really confused about whether these reductions are permanent or if they adjust each year based on what you actually earn. If anyone has experienced this situation, I'd appreciate hearing how it worked out! Thanks for any help understanding this.
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Ravi Malhotra
They adjust it every year based on what u report!! I went thru this exact thing. When u earn over the limit they reduce ur bennefits, but when u earn less the next year they put it back. U have to make sure to report ur earnings estimate to them tho or they just keep it reduced. i learned the hard way and lost $$ for months til I called them.
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Isabella Costa
•Thank you so much for sharing your experience! That's a relief to hear. Do you know if I need to call them or can I update my earnings estimate online through my ssa.gov account?
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Freya Christensen
This is a common question about the Annual Earnings Test (AET). The reduction in benefits due to excess earnings is NOT permanent. SSA recalculates your benefit amount each year based on your reported earnings. Here's how it works: 1) If you earn over the limit while under FRA, SSA withholds $1 in benefits for every $2 earned above the annual limit ($21,240 in 2023). 2) The following year, they'll look at your new earnings estimate. If you'll earn under the limit, your full benefit amount will be restored. 3) Additionally, once you reach your Full Retirement Age, SSA will recalculate your benefit and give you credit for months when benefits were withheld. Be sure to report your expected earnings change to SSA as soon as possible so they can adjust your payments accordingly.
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Isabella Costa
•Thank you for such a detailed explanation! I didn't realize they would actually give me credit later for the months when benefits were withheld. That makes me feel better about the whole situation. I'll make sure to report my lower earnings estimate right away.
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Omar Farouk
One thing that nobody mentioned yet - you should track this carefully yourself. Don't just trust SSA to get it right automatically. Keep records of exactly how much you earn each month, when you report changes to SSA, and what they tell you about adjustments. I had a similar situation where my benefits should have been restored after my income dropped, but there was a 4-month delay before the correct amount started coming through. I had to call multiple times to get it fixed and get back pay for the months they underpaid me.
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Chloe Davis
•THIS!!! SSA makes mistakes all the time and then YOU have to deal with the headache! I worked 2 jobs in 2020, then went down to 1 in 2021 but they kept deducting based on my 2020 income even tho I reported the change!!!
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AstroAlpha
Have any of you actually managed to get through to a real person at Social Security lately? I've been trying for WEEKS about a similar earnings issue. Always get the "all representatives are busy" message and then it hangs up on me! So frustrating when you need to report changes and can't even reach a human being.
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Diego Chavez
•I was having the exact same problem trying to report my earnings change. After 14 attempts over 3 weeks, I discovered a service called Claimyr (claimyr.com) that got me through to an agent in under 10 minutes! They have a video showing how it works: https://youtu.be/Z-BRbJw3puU Totally worth it when you need to make sure your benefits get corrected. The agent I spoke with was able to adjust my earnings estimate and explain exactly when my benefit amount would return to normal. Saved me months of reduced payments.
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AstroAlpha
•Thanks for the tip! I'll check it out. Anything is better than calling for hours and never getting through.
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Anastasia Smirnova
my sister inlaw had this happen to her and she GOT A HUGE BACKPAY check when she turned 67!!! aparently all the money they took away because of working gets recalculated at full retirement age and they gave her like $12,000 at once! wasn't permanent at all for her
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Freya Christensen
•This is correct. At Full Retirement Age, SSA performs a special recalculation called an "adjustment to the reduction factor" that essentially gives you credit for months when your benefits were withheld due to the earnings test. It's not technically "getting back all the money" in every case, but it does increase your permanent monthly benefit going forward to account for those months of withheld benefits.
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Sean O'Brien
THE WHOLE SYSTEM IS DESIGNED TO DISCOURAGE WORKING SENIORS!!! Why should they take away benefits just because you're trying to supplement your income?? It's OUR MONEY we paid in all those years! The earnings limits are just a way to keep more of our money longer. The fact that they eventually "adjust" it doesn't help when you need the money NOW to pay bills.
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Ravi Malhotra
•i agree!! my freind had to choose between a promotion or keeping his benefits. what kind of choice is that??? he wouldve made just enough extra to lose more in benefits than he gained from the raise. its a trap
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Freya Christensen
•While the earnings test can seem unfair, it's important to understand it's not permanently taking away your money. The system is designed to ensure that early retirement benefits are actually going to people who have retired. If you work and earn over the limit, the benefits are recalculated at FRA to compensate for the months benefits were withheld. It's not about "keeping your money" - it's about the timing of when benefits are paid based on the original purpose of the program as retirement insurance.
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Isabella Costa
Thank you all for the helpful responses! I feel much better knowing that these reductions aren't permanent. I'll make sure to report my lower earnings estimate to SSA right away and keep good records of everything. I'm still a few years away from FRA, but it's good to know that they'll make adjustments when I reach 67. I appreciate all the advice!
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Omar Farouk
•Just remember to follow up if you don't see the change in your benefit amount within 1-2 months after reporting. The SSA systems don't always process these updates as quickly as they should. Good luck!
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