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Claiming Benefits Mid-Year? If Continuing to Work, Check Out the Special Earnings Limit Rule. - USAToday.com; The Motley Fool
Social Security regulations stipulate that upon beginning retirement, spousal, or survivor benefits, beneficiaries are considered “retired” and expected to leave the workforce. Current regulations allow continued earnings from employment for those who claim benefits before their full retirement age (NRA), but there is a limit to how much a worker can earn and still receive scheduled benefits before reaching NRA.
Social Security sets annual limits on the earnings early filers can record before those benefits are reduced. The limit changes each year based on the National Average Wage Index (NAWI), with the 2025 limit set at $24.480. Exceeding that limit triggers a $1 reduction for every $2 earned over the limit, affecting benefit payments. In the year the early retiree reaches FRA, there is a different limit and a different reduction factor applicable to the months until the month full retirement age is reached.
The earnings limits just discussed are annual figures. But what if you claim benefits in the middle of the year? That’s where the Special Earnings Limit Rule comes in, with the measurement shifting to a monthly earnings test rather than a full year. For more information on this rule, check out this USAToday post by The Motley Fool’s Matt Frankel, CFP. And, if you still have questions about the application of these earnings test rules to your specific situation, know that the AMAC Foundation offers a free-to-the-public Social Security Advisory Service that can help you. Learn more about this service and how to access it here.http://www.amacfoundation.org/services