What Can You Earn While on Social Security?

Social Security provides financial support for millions of Americans, designed to replace a portion of income lost due to retirement, disability, or the death of a family breadwinner. While many envision Social Security as a benefit received exclusively in full retirement, it is possible to work and receive payments simultaneously. Understanding how your earnings might affect your Social Security benefits is important, as specific rules and limits apply depending on your age and income level.

Annual Earnings Limits and Benefit Adjustments

The Social Security Administration (SSA) applies annual earnings limits to individuals who work while receiving benefits, but these limits vary significantly based on age. If you are below your Full Retirement Age (FRA) for the entire year, a specific earnings limit applies. For 2025, this limit is $23,400. If your earnings exceed this threshold, the SSA will deduct $1 from your Social Security benefits for every $2 you earn above the limit.

A different, higher earnings limit applies during the calendar year you reach your Full Retirement Age. For 2025, this limit is $62,160. In this scenario, the SSA deducts $1 from your benefits for every $3 you earn above this higher limit. Importantly, only the earnings accumulated in the months before you reach your Full Retirement Age are counted towards this limit. Earnings in or after the month you attain your FRA do not affect your benefits under this rule.

Once you reach your Full Retirement Age, the earnings limits no longer apply. You can earn any amount of income without it impacting your Social Security benefit payments. Full Retirement Age is not a universal age for everyone; it varies depending on your birth year, ranging from 66 to 67. For instance, individuals born in 1960 or later have a Full Retirement Age of 67.

Benefits withheld due to exceeding these earnings limits are not permanently forfeited. The SSA recalculates your benefits when you reach your Full Retirement Age. At that point, your monthly benefit amount is increased to account for the benefits that were previously withheld. This adjustment effectively gives you credit for the months when benefits were reduced, increasing your future payments.

Defining Countable Earnings

Understanding what the Social Security Administration considers “countable earnings” is important for those receiving benefits while working. For the purpose of annual earnings limits, countable earnings primarily include wages received from employment and net earnings from self-employment. Wages refer to your gross earnings before any deductions, such as taxes or insurance premiums. For self-employed individuals, countable earnings are the net profits remaining after deducting legitimate business expenses.

However, not all income sources are considered countable earnings by the SSA. Various forms of “unearned income” do not count towards the annual limits and therefore do not affect your Social Security benefits. This category includes pensions, annuities, and various forms of investment income such as dividends, interest, and capital gains. Other examples of non-countable income include military retirement pay, rental income (unless you are a real estate professional), and gifts. Disability benefits are generally not counted, unless they convert to retirement benefits.

Reporting Your Earnings to Social Security

Accurately reporting your earnings to the Social Security Administration (SSA) is a procedural step to ensure you receive the correct benefit amount. It is advisable to report your estimated earnings at the beginning of the year, especially if you anticipate your income will exceed the applicable earnings limits. This proactive approach helps the SSA adjust your benefits in advance, potentially preventing an overpayment that you would later need to repay.

There are several methods available for reporting your earnings to the SSA.
Report online through your personal “my Social Security” account.
Report by phone.
Visit a local Social Security office in person.
Mail in your earnings information.

Maintaining accurate records, such as pay stubs and self-employment ledgers, is recommended to verify your earnings if needed.

After the year ends, the SSA will reconcile your reported estimated earnings with your actual earnings, typically obtained from your tax returns, W-2 forms, or Schedule SE for self-employment income. If there is a discrepancy between your estimated and actual earnings, your benefits for that year will be adjusted accordingly. Failing to report earnings correctly can lead to unintended consequences, such as receiving an overpayment that the SSA will later require you to repay, or an underpayment that will be corrected with a future adjustment.