The Social Security Administration (SSA) has become the main source of income for millions of retirees around our country. Most people of retirement age (or planning to in the coming months) need to be aware of something: if they continue working, or at least receive money from any source, even if they have reached the full retirement age (FRA), they cannot exceed the income limits SSA establishes for this group, because their payments could be cut off.
Do not worry about it, because we are here today to tell you everything you need to know to avoid losing your retirement benefits. Are you ready? Let’s go!
New income limits for 2025
Every year, the SSA updates the income limits for those who are still working while receiving Social Security benefits. For 2025, the income limits have increased slightly compared to 2024:
If you have not reached the full retirement age, you can earn up to $23,400 per year, but if you reach FRA during 2025, the limit is $62,160 (just before your birthday date). However, if you have reached the FRA, there are no limits, and your benefits will not be reduced.
How much are the reductions?
Be aware, because if you exceed this amount, the SSA will reduce $1 for every $2 you earn over this limit. For example, if you are 63 and earn $28,400 annually, you will lose at least $2,500, during that year, almost two months of your check payment if your monthly benefits are around $1,500.
But in the case of people at FRA, in 2025 the SSA will reduce $1 for every $3 earned. Let’s explain it with another example, as we have done before. If a retiree earns $70,160 at 67, he or she will lose approximately $2,667.
In any case, people over 67 years old will not be subject to any income limit, as we mentioned before.
You need to have a plan
Yes, it is important to have a plan before you retire because this cutoff could be temporary, but the impact it can have on your personal budget could be catastrophic if you are not prepared for it.
If you prefer to receive a smaller check amount, there’s no problem, go ahead!
Who would want to keep working?
Even though we wish to retire every Monday morning, we need to be aware that the current situation of the SSA is not the best, so many people prefer to keep working to earn and save more money (if their body lets them, of course) just in case…
That said, this is a very personal decision, and it is not possible in all cases. It is not the same thing as working in a pharmacy as it is in construction… So, take a moment to prepare your future and choose the best option in your case.
Shhh… a tip!
This is a tip no one knows, but if you start receiving your Social Security check in the middle of the year, there is a “special rule” that allows you to get the full check in every month that your income is less than your monthly limit.
Additionally, the SSA only considers wages from employment or net earnings from self-employment for this purpose; therefore, income from pensions, rents, dividends, interest, veterans’ benefits, or government or military retirement plans is not included.
So, this limit can affect retirees more than we ever imagined, which is why it is vital for retirees to know the rules and, of course, to plan their work income. If you have any doubts about it, do not wait, consult with a financial advisor who can guide you!