How Much Can You Earn While Taking Social Security?

Working while receiving Social Security benefits is a common consideration for many individuals approaching retirement. While Social Security provides a foundation of income, additional earnings can supplement finances, enhance lifestyle, or allow for continued professional engagement. Understanding how earnings might affect these benefits is important for planning. The Social Security Administration (SSA) has specific rules to balance work and benefit receipt, which can vary based on an individual’s age and the amount earned. These regulations ensure program integrity while accommodating diverse retirement paths.

Understanding the Retirement Earnings Test

The Social Security Administration (SSA) implements a Retirement Earnings Test (RET) to determine if an individual’s Social Security benefits should be adjusted when they work and earn income before reaching their Full Retirement Age (FRA). This test applies to earned income from wages or net earnings from self-employment, including bonuses, commissions, and vacation pay. Income such as pensions, annuities, investment income, interest, dividends, capital gains, or other government benefits do not count toward the earnings limit.

Central to understanding these rules is Full Retirement Age (FRA), the age at which an individual can receive 100% of their Social Security benefits based on their earnings record. FRA varies depending on the individual’s birth year, generally between 66 and 67. For example, those born in 1960 or later have an FRA of 67.

Earning Limits Before Full Retirement Age

For individuals receiving Social Security benefits who are younger than their Full Retirement Age (FRA) for the entire year, a specific annual earnings limit applies. In 2025, this limit is $23,400. If earnings exceed this amount, the Social Security Administration will reduce benefits by $1 for every $2 earned over the limit.

For instance, if an individual is under FRA for all of 2025 and earns $25,400, which is $2,000 over the $23,400 limit, their Social Security benefits would be reduced by $1,000 ($2,000 / 2). This reduction is applied by withholding future benefit payments until the total amount of the reduction is reached. A special rule applies in the first year benefits are claimed, allowing a monthly earnings limit of $1,950 in 2025. This can prevent benefit withholding in months where earnings are below this threshold, even if annual earnings exceed the limit.

Earning Limits in the Year You Reach Full Retirement Age

A different, higher annual earnings limit applies specifically in the calendar year an individual reaches their Full Retirement Age (FRA). In 2025, this higher limit is $62,160. This limit only applies to earnings received in the months before the month the individual attains their FRA. Once the month of FRA is reached, the earnings limit no longer applies, and benefits are not reduced regardless of earnings.

For earnings that exceed this higher limit before reaching FRA, the Social Security Administration will withhold $1 in benefits for every $3 earned over the limit. For example, if an individual reaches FRA in August 2025 and earns $63,000 in the months from January through July, exceeding the $62,160 limit by $840, their benefits would be reduced by $280 ($840 / 3).

Earning After Full Retirement Age

Once an individual reaches their Full Retirement Age (FRA), the Social Security Retirement Earnings Test no longer applies. This means that Social Security benefits will not be reduced, regardless of how much income is earned from work.

Any Social Security benefits that were previously withheld due to exceeding earnings limits before FRA are not permanently forfeited. Instead, the Social Security Administration recalculates the individual’s monthly benefit amount at FRA. This recalculation accounts for the benefits that were withheld, effectively leading to a higher monthly benefit payment for the remainder of the individual’s life.

Reporting Earnings and Benefit Adjustments

The Social Security Administration (SSA) learns about an individual’s earnings primarily through W-2 forms from employers or Schedule SE (Form 1040) for net earnings from self-employment. It is the beneficiary’s responsibility to report their estimated earnings to the SSA, especially if they anticipate exceeding the earnings limits. This proactive reporting helps the SSA adjust benefits appropriately and can prevent overpayments.

Beneficiaries can report their wages online through their “my Social Security” account, by mail, or by visiting a local Social Security office. It is advisable to report changes in earnings, such as starting or stopping work, or changes in duties, hours, or pay, promptly to the SSA. If actual earnings differ from estimates, the SSA may adjust future benefits or address any overpayment or underpayment. The SSA will then perform an annual review of earnings and make any necessary adjustments or recalculations to ensure accurate benefit payments.