How Much Can You Earn While on Social Security?

Social Security benefits provide a financial safety net for retirement or disability. Many recipients continue working, but specific earning limits apply, which can impact benefits received. Understanding these rules is important for managing your financial situation.

Earning Limits Before Full Retirement Age

Individuals receiving Social Security benefits before their Full Retirement Age (FRA) are subject to earning limitations. FRA is the age when you can receive 100% of your benefits, varying by birth year (e.g., 67 for those born in 1960 or later).

For 2025, if you are under your Full Retirement Age for the entire year, the annual earning limit is $23,400. If your earnings exceed this amount, the Social Security Administration (SSA) will deduct $1 in benefits for every $2 earned over the limit. For instance, if you earn $25,400 in 2025, which is $2,000 over the limit, your Social Security benefits would be reduced by $1,000 ($2,000 ÷ 2). This reduction applies to your total annual benefits.

Benefits withheld due to exceeding these limits are not permanently lost. The SSA recalculates your monthly benefit amount once you reach your Full Retirement Age, potentially leading to a higher monthly payment for the remainder of your life.

Earning Limits in Your Full Retirement Age Year

A more generous earning limit applies during the calendar year you reach your Full Retirement Age. For 2025, this annual earning limit is $62,160.

In the year you reach your Full Retirement Age, the SSA deducts $1 in benefits for every $3 earned above the annual limit. This reduction only applies to earnings in months before you attain your Full Retirement Age within that year. Once you reach your Full Retirement Age, earning limits no longer apply for the remaining months of that year or for any future years.

For example, if you reach your Full Retirement Age in August 2025, the $62,160 limit applies only to your earnings from January through July. If your earnings during those seven months exceed the prorated portion of $62,160, your benefits would be reduced by $1 for every $3 over that amount. Any earnings from August through December would not affect your Social Security payments.

Earning Beyond Full Retirement Age

Once an individual reaches their Full Retirement Age, there are no longer any restrictions on how much you can earn from work. Your Social Security benefits will not be reduced regardless of your income level.

Income Types Included in Limits

Only specific types of income count towards the Social Security earning limits. The SSA primarily considers earnings derived from work. This includes gross wages earned as an employee before any deductions like taxes or insurance are taken out. For individuals who are self-employed, net earnings from self-employment, calculated after deducting business expenses, are counted. Bonuses, commissions, and vacation pay can also be included in this calculation of earned income.

Many other forms of income do not count towards these limits and will not affect your Social Security benefits. This includes income from pensions, annuities, and investment income such as interest, dividends, and capital gains. Rental income generally does not count, unless derived from active participation in a real estate business.

Other excluded income sources include distributions from Individual Retirement Accounts (IRAs) or 401(k) plans, government benefits like veterans’ benefits or workers’ compensation, inheritances, and lawsuit settlements.

Reporting Earnings to Social Security

It is important for individuals receiving Social Security benefits to accurately report their earnings to the Social Security Administration (SSA). This is particularly true when you first apply for benefits or if your earnings change significantly after you start receiving payments. Providing estimated annual earnings helps the SSA determine the correct benefit amount and avoid overpayments or underpayments.

You have several methods for reporting earnings to the SSA:
Online through your My Social Security account.
By phone, contacting the SSA’s national toll-free number or your local office.
In-person visits to a local Social Security office.
By mail.

The SSA uses reported earnings to adjust your benefits. The agency conducts an annual review, reconciling your reported earnings with W-2 forms and self-employment tax returns. If an overpayment occurs due to higher-than-expected earnings, the SSA will withhold future benefits until recovered. If you earned less than estimated, the SSA will pay any underpaid benefits.