How Much Money Can You Make and Draw Social Security?

Social Security provides a financial safety net for millions of Americans, designed to replace a portion of their income in retirement. For individuals who work while receiving benefits, specific rules regarding earnings limits apply.

These regulations balance providing retirement income with allowing beneficiaries to supplement their funds through employment. Understanding these rules is necessary for anyone considering drawing Social Security benefits while continuing to work, as they directly impact the amount of their overall financial benefits received.

Earnings Limits Before Full Retirement Age

Individuals receiving Social Security retirement benefits before reaching their full retirement age face specific annual earnings limits. For 2025, if you are under your full retirement age for the entire year, the earnings limit is $23,400. Exceeding this threshold results in a direct reduction of your Social Security benefits. For every $2 earned above this annual limit, $1 in benefits will be withheld by the Social Security Administration.

For instance, if a person earns $25,400 in 2025 while under full retirement age, they have earned $2,000 over the limit. This results in $1,000 ($2,000 / 2) being withheld from their Social Security benefits for the year. The withheld amount is deducted from future benefit payments, potentially reducing monthly checks until the full amount is recovered.

Full retirement age, also known as normal retirement age, is the age at which an individual can receive their full, unreduced Social Security retirement benefits. This age varies depending on the individual’s birth year. For those born in 1960 or later, the full retirement age is 67. For individuals born between 1943 and 1959, the full retirement age is 66, plus an additional number of months, increasing gradually based on their birth year.

If earnings exceed the annual limit early in the year, benefits may be withheld for several months until the total withheld amount equals the required reduction. The Social Security Administration reviews earnings annually and adjusts future benefits accordingly.

Special Rules for the Year You Reach Full Retirement Age

A different set of more lenient rules applies in the calendar year an individual reaches their full retirement age. For 2025, a higher annual earnings limit applies for the months prior to reaching full retirement age. This limit is $62,160. The benefit reduction rule also changes for this specific period. During these months, the Social Security Administration will withhold $1 in benefits for every $3 earned above this higher limit.

A “monthly earnings test” applies only to the months before the individual’s full retirement age within that specific year. Under this rule, benefits can be paid for any month the individual is considered retired, regardless of total annual earnings, as long as monthly earnings do not exceed a certain threshold.

For example, if someone reaches full retirement age in August 2025 and has already earned $65,000 by July, their earnings before full retirement age exceed the $62,160 limit by $2,840. Based on the $1 for every $3 rule, $946.67 ($2,840 / 3) would be withheld from their benefits for the months leading up to August. Starting in August, when they reach full retirement age, the earnings limit no longer applies, and they can receive their full benefits regardless of how much they earn.

Earning Without Limit After Full Retirement Age

Once an individual reaches their full retirement age, the earnings limits previously discussed no longer apply. Beneficiaries can earn any amount of income from work without their Social Security benefits being reduced or withheld. Thus, individuals who continue to work past their full retirement age will receive their full Social Security benefit amount, in addition to their earnings.

Any Social Security benefits that were withheld due to earnings before reaching full retirement age are not permanently lost. The Social Security Administration recalculates the benefit amount once the individual reaches full retirement age, effectively crediting back the withheld amounts in the form of higher future monthly benefits. This adjustment ensures that beneficiaries eventually receive the full value of their earned benefits.

What Counts as Earnings and How to Report Them

For the purpose of Social Security earnings limits, “earnings” refers to income derived from work. This includes wages received from an employer, such as salary, bonuses, commissions, and vacation pay. Net earnings from self-employment are also considered countable earnings.

Conversely, many other forms of income are not counted towards these limits. Income sources like pensions, annuities, investment income (including interest, dividends, and capital gains), veterans benefits, and government or military retirement benefits do not affect Social Security benefits, regardless of their amount.

Beneficiaries must accurately and promptly report their earnings to the Social Security Administration. Changes in work activity, such as starting or stopping a job, or changes in earnings amounts, should be reported. This can be done through various methods:

• Logging into a personal “my Social Security” online account
• Calling the national toll-free number
• Visiting a local Social Security office
• Sending information by mail