Can You Work Full Time and Draw Social Security?

Social Security benefits provide a financial foundation for millions, offering income replacement in retirement, or due to disability, or for survivors. Understanding the rules for working while collecting Social Security, including earning thresholds and age considerations, helps individuals make informed decisions about their retirement planning and employment.

Understanding Social Security Claiming Ages

Individuals can begin receiving Social Security retirement benefits at different ages, each with distinct implications for benefit amounts. The earliest age to claim retirement benefits is 62, known as the early retirement age. Claiming benefits at this age results in a permanent reduction in the monthly payment compared to waiting longer.

The Full Retirement Age (FRA) is the age at which a person qualifies to receive 100% of their earned Social Security benefits. This age depends on an individual’s birth year. For those born between 1943 and 1954, FRA is 66. It gradually increases by two months for each birth year thereafter, reaching 67 for individuals born in 1960 or later.

Delaying the claim past Full Retirement Age can further increase monthly benefits. For each year benefits are delayed beyond FRA, up to age 70, individuals earn delayed retirement credits. These credits result in a higher monthly payment for the rest of their lives.

Impact of Earnings Before Full Retirement Age

An earnings test applies to individuals who work and claim Social Security benefits before reaching their Full Retirement Age. If earnings exceed certain annual limits, a portion of the Social Security benefits will be temporarily withheld. This rule is important for those considering working while receiving early benefits.

For 2025, if an individual is under Full Retirement Age for the entire year, the earnings limit is $23,400. For every $2 earned above this limit, $1 will be deducted from Social Security benefits. For instance, if someone earns $25,400, which is $2,000 over the limit, their benefits would be reduced by $1,000.

A different earnings limit applies in the year an individual reaches their Full Retirement Age. For 2025, this limit is $62,160. In this specific year, $1 in benefits is deducted for every $3 earned above the limit, but only earnings before the month of reaching Full Retirement Age count toward this test. Once Full Retirement Age is reached, the earnings test no longer applies for that month or any subsequent months.

Working at or After Full Retirement Age

Once an individual reaches their Full Retirement Age, the Social Security earnings test is no longer in effect. This means individuals can earn any amount of income from work without it affecting their Social Security benefit payments.

Any benefits previously withheld due to the earnings test before Full Retirement Age are not permanently lost. The Social Security Administration adjusts the monthly benefit amount upward once an individual reaches their Full Retirement Age. This adjustment accounts for the benefits that were withheld, effectively returning them over time through increased future payments.

Reporting Your Earnings

Individuals receiving Social Security benefits, especially those below Full Retirement Age, must inform the Social Security Administration (SSA) about their expected earnings. The SSA uses information from W-2 forms and self-employment tax returns to track earnings.

Beneficiaries can report their earnings online, by phone, or in person at an SSA office. Providing an estimate of annual earnings allows the SSA to adjust benefits accordingly throughout the year. If actual earnings differ from the estimate, the SSA will reconcile the difference, which may result in either a repayment or a further adjustment to future benefits.

Taxation of Social Security Benefits

Social Security benefits can be subject to federal income tax, depending on an individual’s total “combined income.” Combined income is calculated by adding your Adjusted Gross Income (AGI), any nontaxable interest, and one-half of your Social Security benefits. This calculation determines whether a portion of your benefits will be included as taxable income.

For individual filers, if combined income is between $25,000 and $34,000, up to 50% of Social Security benefits may be taxable. If combined income exceeds $34,000, up to 85% of benefits may be subject to federal income tax. For those filing a joint return, the thresholds are $32,000 to $44,000 for up to 50% taxation, and over $44,000 for up to 85% taxation. State income tax rules vary, so consult state-specific regulations regarding Social Security benefit taxation.