How Much Money Can I Make and Still Collect Social Security?

Navigating Social Security benefits while continuing to work can present questions about how earnings might affect payments. While the Social Security Administration (SSA) permits beneficiaries to work, specific regulations govern how much can be earned before benefits are impacted. This article clarifies these rules.

Understanding the Social Security Earnings Test

The Social Security earnings test is a provision that may temporarily reduce Social Security benefits if a beneficiary earns income above certain thresholds before reaching their full retirement age. The concept of “Full Retirement Age” (FRA) is central to this test, representing the age at which an individual becomes eligible to receive 100% of their primary Social Security benefit. Your specific Full Retirement Age is determined by your birth year, varying from 66 to 67 years old. For individuals born in 1960 or later, the Full Retirement Age is 67.

Working Before Your Full Retirement Age

If you are receiving Social Security benefits and have not yet reached your Full Retirement Age, your earnings are subject to an annual limit. Exceeding this limit can lead to a temporary reduction in your benefit payments. For the year 2025, the annual earnings limit for beneficiaries under their Full Retirement Age is $23,400. This amount typically adjusts each year to account for economic changes.

When your earnings surpass this threshold, the Social Security Administration withholds benefits at a specific rate. For every $2 you earn above the annual limit, $1 in Social Security benefits is withheld. For example, if a beneficiary earns $24,400 in 2025, which is $1,000 over the limit, their Social Security benefits would be reduced by $500 ($1,000 divided by 2).

Benefits withheld due to the earnings test are not permanently lost. Instead, they are factored into a recalculation of your benefits once you reach your Full Retirement Age. At that point, the SSA adjusts your monthly benefit amount upward to account for the benefits that were previously withheld.

Working at or After Your Full Retirement Age

The rules regarding earned income and Social Security benefits change significantly in the year you reach your Full Retirement Age (FRA) and thereafter. During the calendar year in which you attain your FRA, a special, higher earnings limit applies to your income earned in the months before your birthday month. For 2025, this higher limit is $62,160. The Social Security Administration withholds $1 in benefits for every $3 you earn above this limit.

This specific rule only applies to earnings received up to the month you reach your Full Retirement Age; earnings from your birthday month onward are not counted towards this limit. For instance, if your FRA is in August, only earnings from January through July are subject to this test. Crucially, once you reach your Full Retirement Age, the earnings test no longer applies at all. You can earn any amount of money from work without your Social Security benefits being reduced.

What Counts as Earned Income

For the purpose of the Social Security earnings test, “earned income” refers specifically to compensation received for work performed. This category primarily includes wages received from an employer, which is typically reported on a W-2 form. It also encompasses net earnings from self-employment, which is the profit generated from a business or freelance work after deducting allowable business expenses.

Several types of income are not considered “earned income” for the Social Security earnings test and therefore do not affect your benefits. These non-countable sources include pensions, government annuities, and other retirement plan distributions. Investment income, such as interest earned from savings accounts, dividends from stocks, or capital gains from the sale of assets, is also excluded. Rental income from properties you own, severance pay, and other unearned income sources do not impact the earnings test.

Reporting Your Earnings

When you begin receiving Social Security benefits and continue to work, it is important to report your estimated earnings to the Social Security Administration (SSA). This initial reporting helps the SSA determine your eligibility for benefits and calculate any potential reductions based on the earnings test. If your earnings change significantly throughout the year, such as due to a new job or a change in work hours, you should promptly update the SSA with this revised information.

You can report your earnings to the SSA through various methods, including online, by phone, or in person at a local Social Security office. The SSA uses the reported earnings to ensure that you receive the correct benefit amount each month. Failing to report earnings accurately or under-reporting them can lead to benefit overpayments. If an overpayment occurs, the SSA will typically require repayment, which can sometimes be recovered by withholding future benefit payments until the overpaid amount is recouped.