How Much Can You Earn at Full Retirement Age?

Working during retirement is a common consideration for many individuals approaching their later years, often prompting questions about how earned income might interact with Social Security benefits. Understanding these regulations is important for effectively managing one’s financial resources in retirement. The impact of continued employment on benefit payments depends on one’s age and the amount of income earned.

Defining Full Retirement Age

Full Retirement Age (FRA) is a specific age designated by the Social Security Administration when an individual becomes eligible to receive their primary Social Security benefit amount without reduction. This age varies by birth year. For those born in 1943 through 1954, FRA is 66 years old.

The FRA gradually increases for individuals born after 1954. For instance, if you were born in 1955, your FRA is 66 and two months, while those born in 1956 have an FRA of 66 and four months. This incremental increase continues until it reaches 67 years old for anyone born in 1960 or later. Reaching this milestone age changes how the Social Security Administration evaluates earned income in relation to benefit payments.

Earning Without Limit at Full Retirement Age

Once an individual reaches Full Retirement Age, there are no limitations on how much they can earn from work without impacting their Social Security retirement benefits. This means an individual can continue to work and earn any amount of income, and their monthly Social Security benefit will not be reduced due to those earnings.

While earned income at or after FRA does not reduce Social Security benefits, these earnings may still be subject to federal income tax. The taxation of Social Security benefits is a separate consideration based on an individual’s overall income, not directly tied to the earnings test. This “no limit” rule begins in the month an individual attains their Full Retirement Age and applies for all subsequent months.

Earning Limits Before Full Retirement Age

If an individual begins receiving Social Security benefits before reaching Full Retirement Age, their benefits may be subject to reduction if earnings exceed certain annual limits. The Social Security Administration applies an earnings test to temporarily withhold benefits if earnings exceed two distinct limits, depending on the timing.

For individuals younger than their Full Retirement Age for the entire year, the earnings limit in 2025 is $23,400. If earned income surpasses this amount, $1 in benefits is withheld for every $2 earned over the limit. For example, if someone earns $25,400, which is $2,000 over the limit, their benefits would be reduced by $1,000.

A different, higher earnings limit applies in the calendar year an individual reaches 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 the individual’s birth month when they reach FRA. Any benefits withheld due to these earnings limits are not permanently lost; instead, they are added back into the benefit calculation at Full Retirement Age, potentially leading to higher monthly payments in the future.

What Counts as Earnings

Only specific types of income count as “earnings” for Social Security’s limits. This primarily includes wages from employment, such as salaries, bonuses, and commissions. For self-employed individuals, only their net earnings from self-employment count towards these limits.

Income sources that do not count towards the Social Security earnings limits include passive income and other benefits. Examples not subject to the earnings test are pension payments, annuity payments, and investment income like interest, dividends, or capital gains. Government or military retirement benefits and Social Security benefits themselves are also not considered.