The United States Social Security Administration (SSA) has issued an important notice for those planning to retire mid-year. There is a special rule that allows new retirees to receive their full Social Security benefit, even if their annual income exceeds the established limit. When a person retires before reaching full retirement age (generally 67 years old) and has already earned more than the annual income limit, the SSA applies a special rule.
This rule allows the retiree to receive the full Social Security benefit for any full month in which they are considered retired, regardless of their annual income. This is particularly beneficial for individuals who retire mid-year and have exceeded the annual income limit due to earnings earlier in the year. The rule applies during the first year of retirement, specifically if retirement occurs mid-year.
For instance, if a person retires in June, they may have already exceeded the annual income limit.
Special rule for mid-year retirees
However, they can still receive full benefits for the months in which their income is below a certain threshold and they do not perform substantial services in self-employment.
For those below full retirement age throughout 2025:
– Considered retired in any month where monthly income is $1,950 or less and no substantial services in self-employment are performed. For those reaching full retirement age in 2025:
– Considered retired in any month where monthly income is $5,180 or less and no substantial services in self-employment are performed. “Substantial services in self-employment” is defined by the SSA as spending more than 45 hours per month on a business or between 15 and 45 hours on a business in a highly skilled occupation.
It is crucial for retirees to monitor their monthly income and work activities to ensure compliance with these requirements. Failure to meet the criteria in any given month will result in the loss of Social Security benefits for that month. This special rule provides significant relief for those who might otherwise lose out on their full benefits due to exceeding annual income limits in the initial year of retirement.
For ongoing updates and more detailed information, retirees are encouraged to consult the official SSA website or contact their local SSA office.
