How Much Money Can You Make on Social Security?

Individuals nearing or in retirement often wonder how much they can earn while receiving Social Security benefits. Social Security benefits, designed to provide income during retirement, can be affected by earned income if you are below your full retirement age. This article explains the specific earnings limits and how they influence your benefit amount, depending on your age relative to your Full Retirement Age.

Overview of Social Security Earnings Limits

Social Security earnings limits balance work income with benefit payments for those who have not yet reached their full retirement age. These limits apply to “earned income,” including wages from employment and net earnings from self-employment. This covers salaries, bonuses, commissions, tips exceeding $20 per month, vacation pay, and severance pay.

Conversely, many other forms of income do not count against these limits. Income sources such as pensions, annuities, investment income like interest, dividends, and capital gains are not considered “earnings” for Social Security purposes. Rental income, other government benefits, and distributions from retirement accounts like IRAs also do not affect your Social Security benefits.

Earnings Limits Before Full Retirement Age

Individuals receiving Social Security benefits who have not yet reached their Full Retirement Age (FRA) are subject to an annual earnings limit. For 2025, this limit is $23,400. If your earnings exceed this amount, your Social Security benefits will be reduced.

The reduction formula states that $1 in benefits will be withheld for every $2 earned above the annual limit. For example, if an individual earns $25,400 in 2025, which is $2,000 over the limit, their benefits would be reduced by $1,000 ($2,000 / 2).

Earnings Limits During the Full Retirement Age Year

A different set of rules applies to earnings during the calendar year an individual reaches their Full Retirement Age (FRA). In 2025, a higher annual earnings limit of $62,160 applies to this specific period. The benefit reduction formula also changes, with $1 in benefits being withheld for every $3 earned above this limit.

These special rules apply only to earnings received in the months before the individual’s birth month when they reach their FRA. For instance, if someone reaches FRA in August 2025, only their earnings from January through July count against this higher limit. Once the month of their FRA is reached, the earnings limit no longer applies, and they can earn any amount without further benefit reduction.

Earnings After Full Retirement Age

Once an individual reaches their Full Retirement Age and beyond, there is no longer any earnings limit. You can earn any amount of money without affecting your monthly Social Security payments.

Any benefits that were withheld due to earnings exceeding the limits before reaching FRA are not permanently lost. The Social Security Administration automatically recalculates your monthly benefit amount at your Full Retirement Age to account for the benefits that were previously withheld. This recalculation results in a permanent increase in your future monthly benefit payments.