Does Working Part Time Affect Social Security?
Navigate Social Security rules for working. Understand how earnings limits impact your benefits and how continued work can shape your future payments.
Social Security benefits provide a financial foundation for millions, offering income during retirement, disability, or to survivors. Many individuals wonder how continuing to work, especially part-time, might influence these benefits. The impact of earnings depends on several factors, including your age and the amount of income you receive. Understanding these regulations is important for making informed decisions about your financial future.
Earnings Limit Before Full Retirement Age
Individuals who begin receiving Social Security benefits before reaching their full retirement age (FRA) are subject to an annual earnings limit. For 2025, if you are under your full retirement age for the entire year, the earnings limit is $23,400. For every $2 you earn above this amount, $1 will be withheld from your Social Security benefits.
In the year you reach your full retirement age, a higher earnings limit of $62,160 applies to the months before you reach your FRA. During this period, the Social Security Administration will deduct $1 in benefits for every $3 you earn over this higher limit. Once you reach your full retirement age, the earnings limit no longer applies, and you can earn any amount without your benefits being reduced.
Working At or After Full Retirement Age
Once you attain your full retirement age, the annual earnings limit that applies to younger beneficiaries is removed. This means you can earn any amount from working without experiencing a reduction in your Social Security benefits. For individuals born in 1960 or later, full retirement age is 67.
While there are no earnings limitations at or after full retirement age, continuing to work can still positively influence your overall benefit amount. Any benefits withheld due to earnings before reaching your full retirement age are not permanently lost; your monthly benefit will be increased at your full retirement age to account for those withheld funds. This adjustment ensures that the value of your earned benefits is eventually returned to you.
What Counts as Earnings for Social Security
The Social Security Administration has specific definitions for what constitutes “earnings” when determining the earnings limit. Only wages from employment or net earnings from self-employment are counted. This includes various forms of compensation such as hourly wages, salaries, bonuses, commissions, and even vacation pay. If you are self-employed, your net profit is considered earned income.
Conversely, many types of income do not count against the Social Security earnings limit. These include pensions, annuities, investment income (like interest and dividends), capital gains, rental income (unless you are in the real estate business), and other government or military retirement benefits. Understanding this distinction is important for accurately assessing how your total income might impact your Social Security benefits.
How Continued Work Can Increase Future Benefits
Continuing to work, even after you begin receiving Social Security benefits, can lead to a higher benefit amount in the future. The Social Security Administration recalculates benefits annually. If your current earnings are higher than one of your past low-earning years, or a year with no earnings, that new higher earning year can replace a lower one in your earnings record. This recalculation, based on your highest 35 years of indexed earnings, can result in an increase to your monthly benefit.
Delaying the start of your Social Security benefits past your full retirement age can significantly increase your monthly payments through delayed retirement credits. For those born in 1943 or later, your benefit amount increases by 8% for each year you delay claiming benefits, up to age 70. These credits are added to your monthly payment, providing a permanent increase that can lead to a substantially higher lifetime benefit, especially for those who live longer.
Accessing Your Social Security Information
To gain a clear understanding of your personal Social Security situation, creating a “my Social Security” online account is an important step. This free and secure account, accessible through the Social Security Administration’s website, offers personalized tools and information. You can access your earnings record, review estimates of your future retirement, disability, and survivor benefits, and view your Social Security Statement.
The online account also allows you to manage your benefits if you are already receiving them, including changing your address or direct deposit information, and obtaining a benefit verification letter. Setting up this account involves verifying your identity, often through a credential service provider, and requires a valid email address and Social Security number. This platform provides direct access to your specific benefit information, helping you plan effectively.