Earnings in the year you start SocSec benefits, prior to your benefits start date, do not count against the annual earning limit ($22,320 for 2024). Otherwise everyone claiming SocSec would likely have to do so in the first half of the year. See SSA.gov Receiving Benefits While Working's special rule for year-1.she will be starting social security in January 2025 with a plan to retire by May 2025 before she hits the earned income limit for SS.
The also have a FAQ Topic on this special rule.If your earnings will be more than the limit for the year and you will receive retirement benefits for part of the year, we have a special rule that applies to earnings for 1 year. The special rule lets us pay a full Social Security benefit for any whole month we consider you retired, regardless of your yearly earnings.
So if you mom wants to retire in Jan, Jul, or Dec it's all fine, but she is not forced to choose a month to retire to "stay under the limit."Sometimes people younger than full retirement age retire in the middle of the year and have already earned more than the yearly earnings limit. There is a special rule that applies to earnings for 1 year, usually the first year of retirement. Under this rule, you can get a full Social Security benefit for any whole month you are retired and earnings are below the monthly limit. It is important to note that you cannot perform substantial services in self-employment during these months.
Edit: I just noticed you said she would start benefits in Jan but retire in May; why not just start benefits coincident with her retirement month in May?
I suppose that's fine if her income month-by-month is < $1,860. If she has higher income than $1,860 in one month and lower income in a future month, they will still likely reduce her benefits (like docked pay, it should go back to the normal benefit once the penalty is paid)..
Statistics: Posted by bonesly — Fri Sep 13, 2024 9:38 pm