At Age 65, How Much Can I Earn While on Social Security?
Planning to work at 65? Learn how earning income affects your Social Security, taxes, and Medicare premiums.
Turning age 65 often prompts individuals to evaluate their financial landscape, particularly regarding retirement benefits and continued employment. Understanding how earning income can interact with Social Security benefits, taxation, and healthcare costs is a significant part of this financial planning. Individuals navigating this stage of life benefit from a clear understanding of these interconnected aspects.
Social Security Earnings Limits
Receiving Social Security benefits while continuing to work can affect the amount received, especially before reaching Full Retirement Age (FRA). FRA varies by birth year, typically ranging from 66 to 67.
The Social Security Administration implements an “earnings test” that reduces benefits if earned income exceeds specific limits before reaching FRA. For 2025, if an individual is under their Full Retirement Age for the entire year, $1 in benefits will be withheld for every $2 earned above an annual limit of $23,400. This limit applies to wages from employment and net earnings from self-employment.
A different, higher earnings limit applies in the calendar year an individual reaches their Full Retirement Age. For 2025, this limit is $62,160. In this year, $1 in benefits is withheld for every $3 earned above this limit, but only for earnings accumulated in the months before the individual’s FRA. Once an individual reaches their Full Retirement Age, the earnings test no longer applies. Any withheld benefits are generally repaid as higher monthly benefits once FRA is reached.
Taxation of Social Security Benefits
Beyond the earnings limits, earning income can also influence the federal taxation of Social Security benefits. A portion of Social Security benefits may become taxable depending on a recipient’s “provisional income.” Provisional income is a specific calculation used by the Internal Revenue Service (IRS) to determine this tax liability.
Provisional income is calculated by adding an individual’s Adjusted Gross Income (AGI), any tax-exempt interest, and half of their Social Security benefits. If this calculated provisional income exceeds certain thresholds, a portion of the Social Security benefits becomes subject to federal income tax. For single filers, if provisional income is between $25,000 and $34,000, up to 50% of Social Security benefits may be taxable. If provisional income exceeds $34,000, up to 85% of benefits may become taxable.
For those filing jointly as a married couple, the thresholds are higher. If their provisional income falls between $32,000 and $44,000, up to 50% of their Social Security benefits may be taxable. If their provisional income surpasses $44,000, up to 85% of their benefits may be subject to taxation. Additional earned income directly contributes to provisional income, potentially pushing individuals into higher tax brackets for their Social Security benefits.
Medicare Premium Adjustments
Higher earned income can also lead to increased Medicare Part B and Part D premiums through Income-Related Monthly Adjustment Amounts (IRMAA). IRMAA is an additional amount that individuals with higher incomes pay for their Medicare coverage. The income used to determine IRMAA is typically the Modified Adjusted Gross Income (MAGI) from the tax return filed two years prior to the current Medicare year. For example, 2025 Medicare premiums are based on the MAGI reported on 2023 tax returns.
The standard monthly premium for Medicare Part B in 2025 is $185.00. However, if an individual’s MAGI exceeds certain thresholds, IRMAA surcharges are added. For 2025, single individuals with a 2023 MAGI above $106,000 will pay a higher Part B premium. For married couples filing jointly, the threshold for increased premiums begins when their 2023 MAGI exceeds $212,000.
These surcharges are tiered, meaning the amount of the additional premium increases at various higher income levels. Earned income, whether from employment or self-employment, directly contributes to the MAGI used for IRMAA determination. Continued earning at higher levels can result in these increased Medicare premiums.