The “First Year” Earnings Test Rule: How to Retire Mid-Year Without a Penalty
Confused by Social Security?
Retiring mid-year? You might earn over the annual limit but still get a full check thanks to the Monthly Earnings Test.
How It Works
In your first year of retirement, the SSA can look at your earnings month-by-month. Regardless of annual earnings, you get a check for any month you earn under the monthly limit.
Why This Matters
You don’t have to wait until January to retire. You can start cash flow the moment you stop working.
Retiring mid-year?
Let’s make sure you qualify for the Monthly Test exception.
Warning
This is a one-year-only rule. Next year, you are back on the strict Annual Test.
About Author
Ray R. Harris
Ray R. Harris, RSSA®, partners with tax and legal professionals to provide specialized Social Security claiming analysis for high-net-worth clients aged 58–70. A former executive with an MBA and background in Finance, Ray mitigates liability for his partners by ensuring their clients optimize spousal benefits, tax efficiency, and lifetime income.
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