Will My Social Security Check Increase If I Continue to Work?

Social Security serves as a fundamental component of financial security for millions of Americans, providing a safety net that replaces a portion of income during retirement, disability, or for survivors. The amount an individual receives from Social Security is directly tied to their lifelong earnings and work history. Understanding how continued work influences these benefits is important for financial planning.

How Your Social Security Benefit Is Determined

Your Social Security benefit is primarily calculated based on your lifetime earnings that were subject to Social Security taxes, known as “covered earnings.” The Social Security Administration (SSA) uses a specific formula to determine your Primary Insurance Amount (PIA), which represents the monthly benefit you would receive if you claim benefits at your Full Retirement Age (FRA). This calculation begins by adjusting your past earnings to account for changes in average wages over time, a process called “indexing.”

Indexing ensures that your past earnings reflect their current value, preventing inflation from diminishing their impact on your benefit calculation. The SSA then takes your 35 highest earning years, after they have been indexed, and sums them. This total is divided by the number of months in 35 years to arrive at your Average Indexed Monthly Earnings (AIME).

The AIME is then applied to a progressive formula to determine your PIA. This formula uses “bend points,” which are dollar amounts that define the segments of your AIME that are multiplied by different percentages. For instance, a certain percentage is applied to the first segment of your AIME, a smaller percentage to the next segment, and an even smaller percentage to the highest segment. This progressive structure means that lower earners receive a higher percentage of their average earnings back as benefits compared to higher earners, though higher earners still receive a larger absolute benefit amount. Maximizing your earnings during your working career directly contributes to a more substantial Social Security benefit in retirement.

Working Before Claiming Social Security Benefits

Continuing to work prior to claiming Social Security benefits can significantly increase your eventual monthly payment. Social Security calculates your benefit based on your 35 highest years of indexed earnings. If you work more than 35 years, the years with the lowest earnings, or even years with no earnings, are dropped from the calculation.

When you continue working, especially if your current earnings are higher than some of your past earnings, these new higher-earning years can replace earlier, lower-earning years in your 35-year record. This replacement effectively raises your Average Indexed Monthly Earnings (AIME). For example, if you had a year early in your career with low earnings or a year where you did not work, a new year of higher earnings will push that lower-earning year out of the top 35.

This increases your AIME, leading to a higher Primary Insurance Amount (PIA). Even if you have already worked for 35 years, continued employment at a higher salary can still improve your benefit. Each new year of high earnings that replaces a lower-earning year enhances your overall average.

Working longer, particularly during your peak earning years, is a straightforward way to boost your Social Security benefit. It ensures your benefit calculation reflects your most robust financial contributions, leading to a more favorable monthly payment.

Working While Receiving Social Security Benefits

Working while already receiving Social Security benefits involves different considerations depending on your age relative to your Full Retirement Age (FRA). For individuals who continue to work and earn income before reaching their FRA, the Social Security Administration applies a “retirement earnings test.” This test sets annual earnings limits, and if your earnings exceed these limits, a portion of your Social Security benefits may be temporarily withheld.

For 2025, if you are under your FRA for the entire year, the earnings limit is $22,320. If you earn more than this, $1 in benefits is withheld for every $2 you earn above the limit. In the year you reach your FRA, a higher earnings limit applies, which is $59,520 for 2025, and $1 in benefits is withheld for every $3 earned above this amount, but only for months before you reach your FRA.

Any benefits withheld due to the earnings test are not permanently lost. When you reach your FRA, the Social Security Administration recalculates your benefit amount to account for the months in which benefits were withheld. This recalculation often results in a higher monthly benefit payment for the remainder of your life, effectively crediting you for the foregone benefits.

Once you reach your Full Retirement Age, the retirement earnings test no longer applies. This means you can earn any amount of income without your Social Security benefits being reduced or withheld. Even at or after FRA, continued work with higher earnings can still increase your monthly benefit. If your current earnings are higher than one of the 35 years previously used, the SSA will automatically substitute the higher earning year, increasing your Primary Insurance Amount.

Furthermore, delaying claiming Social Security benefits beyond your Full Retirement Age, up to age 70, provides an additional opportunity to increase your monthly payments through “Delayed Retirement Credits” (DRCs). For each month you delay claiming past your FRA, your benefit amount increases. These credits accumulate at 8% per year for those born in 1943 or later, meaning your benefit can increase by up to 32% if you delay claiming from FRA to age 70. These credits are added to your PIA regardless of whether you are working.