Working until age 65 in December - will SS retirement benefits be reduced if I start payments in January?
I'm getting ready to retire and have a question about the earnings limit. I filed my retirement application with Social Security last week, requesting my benefits to start in January 2025 when I'll be 65 and 1 month. The problem is I'm planning to work through December 2024 (when I turn 65), and my HR department mentioned something about an earnings test that might reduce my benefits. I make about $75,000/year, so my December earnings would be around $6,250. Should I stop working in November instead? Will working in December affect my January payment? I'm confused about whether the earnings limit applies to the month before benefits start. The SSA website mentions something about a "grace year" but I don't understand if that applies to me. Has anyone dealt with this situation before?
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Kai Santiago
You're actually fine to work through December! Since you'll be starting benefits in January 2025, your December 2024 earnings won't affect your Social Security retirement benefits at all. The earnings limit only applies once you're actually receiving benefits. Also, since you're turning 65 in December 2024, you'll reach your Full Retirement Age (FRA) at 66 and 10 months (assuming you were born in 1958). While you're still under FRA when benefits start, the earnings limit for 2025 would only apply to earnings you make WHILE receiving benefits (January 2025 onward). Work all you want in December - it won't impact your January payment!
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Carmella Popescu
•Thank you! That's a huge relief. So just to be 100% clear - even though I'll be receiving benefits starting in January before reaching my full retirement age, my December earnings won't count toward any earnings test? I was so confused by all the different rules.
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Lim Wong
i had this exact same question last year!!! worked til december then started SS in january. nobody told me anything about penalties and i got my full payment no problem
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Dananyl Lear
Let me clarify something important here. The previous responses are mostly correct, but there's a nuance about the earnings test worth understanding. The annual earnings test looks at your TOTAL yearly earnings in the year you're receiving benefits. In 2025, assuming you start benefits in January, the earnings limit for someone under Full Retirement Age (FRA) will likely be around $22,300 (it's $21,240 for 2024, with annual adjustments). If you earn over that amount in 2025 while receiving benefits, SSA will withhold $1 in benefits for every $2 you earn above the limit. Your December 2024 earnings don't count toward this. But here's where it gets interesting - the year you reach FRA, the limit is much higher (approximately $59,520 in 2024) and the withholding is only $1 for every $3 above the limit. And this only applies to earnings in the months BEFORE the month you reach FRA. Since your FRA is 66 and 10 months, you'll have more flexibility with the earnings test in the year you reach that age. So yes, work through December 2024, and just be mindful of the 2025 earnings limit if you plan to continue working while collecting benefits before reaching your FRA.
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Carmella Popescu
•This is really helpful, thank you! I'm planning to fully retire in January so I shouldn't have any earnings in 2025 that would trigger the limit. It sounds like my December earnings are completely in the clear since they're in a different calendar year from when my benefits start.
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Noah huntAce420
TRUST ME, get everything in writing!!! I thought I was fine but then got a letter saying my benefits were reduced because of "excess earnings" and it took MONTHS to fix. Social security reps told me 3 different things. The whole system is a MESS!!! I'd call them directly to confirm before deciding.
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Ana Rusula
•I had a similar nightmare with Social Security last year. I kept getting disconnected or waiting on hold for hours. Finally found this service called Claimyr (claimyr.com) that got me connected to an agent in under 5 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU Totally worth it because I got an official answer about my retirement earnings situation directly from SSA. The agent confirmed exactly what the first commenter said - December earnings don't affect January benefits when they're in different calendar years.
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Noah huntAce420
•Thanks for sharing that! I wasted a whole DAY on hold last time I tried calling them. Bookmarking that site for next time I have to deal with SSA!
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Fidel Carson
my sister had this exact issue!!! but she was 64 not 65 so maybe different rules apply?? she had to pay back some benefits but i think it was because she made like 100k that year
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Kai Santiago
•Your sister's situation was likely different. If she was receiving benefits throughout the year while also earning $100k, she would definitely exceed the earnings limit and have benefits withheld. The key difference in the original poster's situation is that they're working in December 2024 but not starting benefits until January 2025 - different tax years.
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Isaiah Sanders
So wait im confused... does this mean if i start my ss benefits in January too, I can work all of December without any impact? What if I'm only 63 though? Is there a special rule just for people turning 65 in December or does this apply to everyone?
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Dananyl Lear
•The age doesn't matter for this particular question. What matters is that December 2024 and January 2025 are in different calendar years. If you start benefits in January 2025 (regardless of your age), your 2024 earnings (including December) won't affect those benefits. However, if you're under Full Retirement Age (FRA) when receiving benefits in 2025, you'll be subject to the annual earnings test for any work you do in 2025. This currently limits you to earning around $21,240 (2024 figure, will increase slightly for 2025) before benefits are reduced. So anyone can work December 2024 and start benefits January 2025 without December earnings affecting those benefits - this isn't age-specific.
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Carmella Popescu
Thank you all for the responses! I called SSA this morning using that Claimyr service someone mentioned (got through in about 3 minutes!) and confirmed that I can indeed work through December without it affecting my January payment. The representative explained that since December 2024 and January 2025 are in different tax years, they're treated separately. I'm going to work through December as planned and will start receiving my retirement benefits in January. Since I'm fully retiring at that point, I won't have any earned income in 2025 that would trigger the earnings limit. I appreciate everyone's help in understanding this confusing topic!
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