If I Retire at 64, How Much Can I Earn?
Discover how working at age 64 affects your retirement income and what to consider for effective planning.
Retiring involves financial considerations, especially if you plan to continue working. Many individuals contemplate how their earnings might interact with Social Security benefits, particularly when approaching age 64. Understanding the rules for working while receiving benefits is important for informed financial decisions. This article explores earning income while receiving Social Security benefits before reaching your full retirement age.
Social Security Earnings Limits Before Full Retirement Age
Individuals receiving Social Security retirement benefits before their full retirement age (FRA) are subject to annual earnings limits. Your FRA is determined by your birth year; for those born in 1960 or later, it is 67. If you are younger than your FRA for the entire year, the Social Security Administration (SSA) will deduct a portion of your benefits if your earnings exceed a specific annual threshold.
For 2025, if you are under full retirement age for the entire year, the earnings limit is $23,400. For every $2 you earn above this limit, $1 will be deducted from your Social Security benefits. This limit changes annually.
A different, higher earnings limit applies in the year you reach your full retirement age. In 2025, this limit is $62,160, and for every $3 earned above this amount, $1 is withheld from benefits until the month you reach your FRA. Once you reach your full retirement age, there is no longer any limit on how much you can earn, and your Social Security benefits will not be reduced regardless of your income. These limits exist because Social Security is designed to replace a portion of lost earnings due to retirement, not to supplement income while continuing to work full-time before reaching full retirement age.
How Earnings Reduce Social Security Benefits
When your earnings exceed the annual limit, the Social Security Administration withholds benefits. For those under full retirement age, $1 is withheld from your benefits for every $2 earned above the annual limit. These withheld benefits are not permanently lost. When you reach your full retirement age, the SSA recalculates your benefit amount to account for benefits previously withheld due to your earnings. This recalculation increases your future monthly benefit, compensating you for benefits not paid out earlier. For example, if an individual at age 64 earns $30,000 in 2025, exceeding the $23,400 limit by $6,600, the SSA would withhold $3,300 from their annual benefits. The SSA would then adjust their benefit upward upon reaching full retirement age to compensate for this withholding.
Income Types and Reporting for Earnings Limits
The Social Security earnings limit applies only to earned income from work. This includes wages received from an employer and net earnings derived from self-employment activities. Income sources like bonuses and commissions also count towards this limit. Many other forms of income do not affect your Social Security benefits under the earnings limit rules. These non-countable income types include pensions, annuities, investment income such as dividends, interest, and capital gains, as well as rental income. Distributions from retirement accounts like IRAs or 401(k)s and government or military retirement benefits are also not counted against the earnings limit. The Social Security Administration receives information about your earnings through standard reporting mechanisms. Employers report wages to the SSA through W-2 forms. For those who are self-employed, net earnings are reported to the SSA when you file your tax returns. The SSA maintains an earnings record based on this reported information, which is used to determine benefit eligibility and amounts.
Planning Your Earnings at Age 64
When you are 64 and receiving Social Security benefits, managing your earnings can help align your financial goals with the program’s rules. Monitor your income throughout the year to stay aware of how close you are to the annual earnings limit. This allows you to make adjustments if necessary, potentially preventing unexpected reductions in your Social Security payments.
The Social Security Administration’s official website provides current earnings limits and access to your personal earnings statement. Your online “my Social Security” account offers access to your earnings record, estimated benefits, and planning tools. Review your earnings record periodically to ensure accuracy, as discrepancies could impact your future benefits. Utilize SSA resources to understand the implications of your earnings and make informed decisions about working while receiving benefits.