DEAR RUSTY: I am writing to you on behalf of my husband. His intentions are to go part time as of Jan. 1, working 30 hours a week and take Social Security benefits as supplemental income. How can we determine what his Social Security benefit would be with him still working part-time? He will be 63 and 7 months old next January and has not yet applied for benefits. — Anxious for Information

DEAR ANXIOUS: If he claims Social Security at age 63 and 7 months, your husband’s benefit will be about 78% of what it would be if he waited until age 67 to claim. And, since your husband will not yet have reached his SS full retirement age (FRA), he will be subject to Social Security’s Annual Earning Test (AET), which limits how much he can earn while working and collecting early Social Security retirement benefits.

The amount he can earn without paying a penalty changes yearly but, for reference, the earnings limit for 2025 is $23,400 per year. If his work earnings exceed the annual limit, Social Security will take away some of his benefits. Using the 2025 limit as an example, if your husband’s annual 2025 earnings were $40,000, then he would owe about $8,300 (half of the amount he exceeded the limit by). Social Security would withhold his monthly benefits for enough months to recover what he owes for exceeding the earnings limit (how many months they withhold would be determined by his monthly SS benefit amount).

FYI, the earnings test lasts until your husband reaches his full retirement age (his FRA is age 67), but in the year he attains his FRA the penalty for exceeding the limit is less — $1 for every $3 over the limit — and the limit is much higher. The annual earnings test no longer applies once your husband reaches his FRA.

When your husband applies for his retirement benefit, Social Security will ask about his work plans and how much he expects to earn each year. Based upon that information, if he expects to exceed the annual limit they will pay his benefits for some months of the year (depending on his projected earnings) and withhold his benefits for the remaining months. They will also monitor his annual earnings as reported to the IRS and make any appropriate benefit adjustment afterwards.

If SS benefits are withheld because your husband exceeded the annual earnings limit, when he reaches his full retirement age (67), Social Security will give him time-credit for all month’s that benefits were withheld. Essentially, they will advance his actual claim date by the number of months benefits were withheld, which will make his monthly benefit higher at his FRA. The higher amount he receives after reaching his FRA will help him recover some of the money withheld as a result of exceeding the earnings limit before his FRA.

Please note that it is always best to inform Social Security up front if your husband plans to work and earn (even part-time) prior to reaching his FRA. The IRS will provide the SSA with your husband’s earnings information, and SSA will (if his projected earnings weren’t disclosed when he applied) issue an Overpayment Notice if he earns more than allowed. He will then be required to repay SS everything owed, or have his benefits withheld until Social Security recovers what he owes.

One final point: by claiming his benefits in January 2026, your husband’s monthly amount will be reduced by about 22% (from the amount he would get at his FRA of 67). Claiming early (before FRA) always results in a benefit reduction, whereas waiting longer than FRA to claim always results in a higher monthly amount (maximum benefit is reached at age 70).

(Russell Gloor is a national Social Security advisor at the AMAC Foundation, the non-profit arm of the Association of Mature American Citizens.)