Can I Work While Receiving Social Security?

The Social Security program provides a financial safety net for millions of Americans, offering retirement, disability, and survivor benefits. A common question for many beneficiaries is whether they can continue to work while receiving payments. The answer is generally yes, though specific rules apply depending on an individual’s age and the amount of income they earn from working. These rules help balance the program’s purpose of providing income replacement with the desire for individuals to remain active in the workforce.

Understanding Social Security Earnings Limits

Social Security implements earnings limits for beneficiaries who have not yet reached their full retirement age (FRA). Full retirement age varies based on your birth year; for those born in 1960 or later, it is age 67. If you are under your full retirement age for the entire year, an annual earnings limit applies. For 2025, this limit is $23,400. For every $2 earned above this threshold, $1 will be deducted from your Social Security benefits.

A different, higher earnings limit applies in the year you reach your full retirement age. For 2025, this limit is $62,160. In this scenario, $1 in benefits is withheld for every $3 earned above the limit, but only for earnings accumulated in the months before you reach your full retirement age. Once you reach your full retirement age, the earnings limit no longer applies, and you can earn any amount without your benefits being reduced. These earnings limits are adjusted annually to account for changes in average wages.

The Social Security Administration (SSA) typically withholds entire benefit checks rather than reducing each payment by a small amount when you exceed the earnings limit. For instance, if your earnings surpass the limit, the SSA might withhold your first few monthly benefit payments until the excess earnings are accounted for.

How Earnings Affect Your Benefits

When an individual’s earnings exceed the applicable limit, the Social Security Administration (SSA) will reduce their benefits. This reduction is based on specific formulas depending on your age relative to full retirement age. For example, if you earn $2,000 above the $23,400 limit in 2025, your annual benefits would be reduced by $1,000.

You might not receive a benefit check for several months if your earnings significantly exceed the limit. The SSA tracks your reported earnings and automatically applies these adjustments. This process ensures that the program recovers the benefits that were overpaid due to your working income.

What Counts as Earnings

For Social Security’s earnings limits, “earnings” refers to income derived from work. This includes gross wages from employment, such as salaries, bonuses, commissions, and vacation pay. For self-employed individuals, net earnings from self-employment (gross income minus allowable business deductions) are counted. These are the types of income that directly impact your Social Security benefits if you are under full retirement age.

Many other types of income do not count towards these earnings limits. This non-countable income includes pensions, annuities, investment income (such as dividends, interest, or capital gains), and other government or military retirement benefits. Income from these sources will not cause your Social Security benefits to be reduced, regardless of the amount. The distinction between earned income and other forms of income is crucial for beneficiaries planning their financial activities.

Reporting Your Earnings to Social Security

Beneficiaries who work while receiving Social Security benefits are responsible for reporting their earnings to the Social Security Administration (SSA). It is important to provide an estimate of your annual earnings at the beginning of the year. If your work situation changes, such as starting or stopping a job, or if your earnings increase or decrease significantly, you should update your earnings estimate promptly. Accurate reporting helps prevent overpayments or underpayments of benefits.

You can report your earnings to the SSA through various methods. These include using your personal “my Social Security” online account, contacting the SSA by phone, or visiting a local Social Security office. When reporting, you should provide details such as your estimated annual earnings and the start or end dates of any employment. The SSA encourages beneficiaries to keep records of all communications and receipts related to their earnings reports.

Future Benefit Adjustments

Even if your Social Security benefits are reduced or withheld due to exceeding the earnings limit before full retirement age, those reductions are not permanent losses. Once you reach your full retirement age, the Social Security Administration (SSA) automatically recalculates your benefit amount. This recalculation takes into account the months during which your benefits were withheld because of your earnings.

The SSA adjusts your future monthly benefit to compensate for the previously withheld amounts. This adjustment effectively increases your monthly payment for the remainder of your life. Additionally, if your earnings in a year after you start receiving benefits are among your highest 35 years of indexed earnings, the SSA will recalculate your benefit to include these higher earnings, potentially leading to a further increase in your monthly payment. This process ensures that any past benefit reductions due to working are eventually credited back, enhancing your long-term financial security.