How Much Money Can You Make While Getting Social Security?

Social Security benefits are designed to provide a financial foundation for millions of Americans, primarily in retirement, but also in cases of disability or loss of a family wage earner. While receiving these benefits, many individuals choose to continue working, whether part-time or full-time. Understanding how earned income can impact Social Security payments is important for effective financial planning. Specific rules and earning limits are in place to determine if and how benefits are adjusted when an individual continues to work while receiving payments.

Earning Limits Before Full Retirement Age

Individuals receiving Social Security benefits before their Full Retirement Age (FRA) are subject to specific earning limits. FRA is set by the Social Security Administration (SSA) and varies by birth year; for those born in 1960 or later, it’s 67.

In 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, your Social Security benefits will be reduced. The SSA will withhold $1 in benefits for every $2 you earn above this annual limit. For example, if you earn $25,000, which is $1,600 over the limit, your benefits would be reduced by $800 ($1,600 / 2).

Income counting toward this limit includes wages and net earnings from self-employment, such as salary, bonuses, and commissions. The Social Security Administration considers income when it is earned, not necessarily when it is paid.

Many types of income do not count towards the earning limit. These include pensions, annuities, investment income, capital gains, government disability payments, veterans benefits, and IRA or 401(k) withdrawals.

Earning Limits in Your Full Retirement Age Year

More flexible rules apply to earnings during the calendar year an individual reaches their Full Retirement Age (FRA). For 2025, this higher annual earning limit is $62,160.

The withholding rule for this year is more lenient; the Social Security Administration will deduct $1 in benefits for every $3 earned above this higher limit. This rule applies only to earnings accumulated before the specific month you attain your FRA. Once you reach your FRA month, your earnings for the remainder of that year will not reduce your benefits.

This monthly earnings rule is helpful for individuals who retire mid-year. It allows them to receive a full Social Security check for any month in which the SSA considers them retired, even if their total annual earnings would have otherwise exceeded the limit. For instance, if you earn significantly in the first part of the year but then stop working before your FRA month, your benefits will not be penalized for those earlier high earnings, provided monthly earnings after reaching FRA stay below a certain threshold.

Earning Limits After Full Retirement Age

Once an individual reaches their Full Retirement Age (FRA), earning limits no longer apply. Beneficiaries can earn any amount of income from work without it affecting their Social Security benefits.

This removal of earning limits signifies a complete transition in how work impacts benefits. Any income earned through employment or self-employment after reaching FRA will not result in a reduction of monthly Social Security payments. This provides greater flexibility for individuals who wish to continue working in their later years.

Any Social Security benefits withheld in prior years due to exceeding earning limits are not permanently lost. These withheld amounts are factored into a recalculation of the individual’s monthly benefit amount once they reach FRA. This adjustment typically results in a higher monthly benefit payment for the remainder of their life, effectively crediting them for previously withheld benefits.

How Social Security Adjusts Benefits

Beneficiaries who are working and receiving Social Security payments before their Full Retirement Age have a responsibility to report their estimated earnings to the Social Security Administration (SSA). This reporting helps the SSA make initial adjustments to benefits, aiming to prevent overpayments or underpayments. Reporting can often be done online, by mail, or in person at a local Social Security office.

The SSA conducts an annual review of actual earnings, using information from W-2 forms or self-employment tax returns. This review compares reported estimates with actual income earned. If actual earnings differ from estimates, the SSA will adjust benefits accordingly.

If excess earnings led to an overpayment, the SSA will recover these funds, often by withholding future benefit checks or reducing their amounts. Conversely, if benefits were withheld but actual earnings were lower than estimated, leading to an underpayment, the SSA will reimburse the beneficiary for the amount owed.

The SSA communicates adjustments through notices and statements, detailing changes to benefit amounts. Proactively reporting earnings helps beneficiaries manage their Social Security payments and avoid potential issues.