How Much Can I Earn and Still Get Social Security?

Social Security benefits provide a financial foundation for millions of Americans in retirement. Many choose to continue working, either part-time or full-time. Understanding how earnings can interact with Social Security benefits is important, as working past a certain point may affect the amount of benefits received. Rules and limits vary based on age and income.

Understanding the Social Security Earnings Test

The Social Security Administration implements an earnings test to determine if benefits should be adjusted when a recipient works and earns above certain thresholds. This test applies to individuals receiving retirement, survivor, or spousal benefits. The specific rules depend on the beneficiary’s age relative to their full retirement age (FRA). FRA is the age at which an individual is entitled to receive 100% of their Social Security benefits, varying from 66 to 67 years old depending on birth year. Claiming benefits before FRA can lead to a temporary reduction in payments due to the earnings test.

Annual Earnings Limits

Annual earnings limits are adjusted each year. These limits vary depending on whether an individual is below their full retirement age or reaches it during the year.

For individuals under their full retirement age for the entire year, the earnings limit in 2025 is $23,400. If earnings exceed this, Social Security withholds $1 in benefits for every $2 earned above the limit. This reduction applies to total annual earnings from work.

A higher earnings limit applies in the year an individual reaches their full retirement age. For 2025, this limit is $62,160. Benefits are reduced by $1 for every $3 earned above this limit, but only for earnings accumulated in months prior to reaching full retirement age. Once an individual reaches their full retirement age month, earnings no longer count towards any limit, and benefits are not reduced.

How Benefits Are Reduced

When earnings exceed the specified limits, Social Security benefits are reduced. For those under their full retirement age, $1 is withheld from benefits for every $2 earned above the annual limit. For example, if someone earns $25,400 in 2025 while under their FRA, which is $2,000 over the $23,400 limit, their benefits would be reduced by $1,000 ($2,000 / 2).

In the year an individual reaches full retirement age, the reduction rate is $1 for every $3 earned above the higher limit, applicable only to earnings before the month of their FRA. For instance, if a person reaches their FRA in August 2025 and earns $63,160 before August, which is $1,000 over the $62,160 limit, their benefits would be reduced by approximately $333 ($1,000 / 3). Earnings from the month an individual reaches FRA onward are not subject to the earnings test.

A special “monthly earnings test” can apply in the first year a beneficiary starts receiving benefits, particularly if they retire mid-year. This rule allows Social Security to pay full benefits for any month in which earnings fall below a specific monthly threshold, regardless of higher annual earnings. This provision benefits individuals who stop working or significantly reduce their hours partway through the year. The earnings test affects the beneficiary’s own retirement, spousal, or survivor benefits, and may also affect benefits paid to their dependents.

What Counts as Earnings

For the Social Security earnings test, “earnings” primarily include wages from employment and net earnings from self-employment. Wages refer to gross pay received from an employer before taxes or other deductions. For self-employed individuals, net earnings are gross income from their business minus allowable business expenses.

Certain types of income are excluded from the earnings test. This includes income from investments (e.g., interest, dividends, capital gains), pensions, annuities, and government retirement benefits. Other forms of unearned income, such as rental income or disability benefits, also do not affect the earnings test.

Recouping Withheld Benefits

Benefits withheld due to the earnings test are not permanently lost; they contribute to a future adjustment. Once a beneficiary reaches their full retirement age, their monthly benefit amount is recalculated by the Social Security Administration. This recalculation accounts for months benefits were withheld, effectively increasing future monthly payments.

This adjustment, known as an actuarial increase, provides a higher monthly benefit for the remainder of the individual’s life. This process compensates beneficiaries for benefits not received while working above earnings limits prior to their full retirement age, ensuring benefits are deferred and returned as a larger ongoing payment.