Yes, you can work and collect Social Security at the same time, but your benefits may be reduced if you earn above a certain amount before your full retirement age
Social Security does not stop you from working. However, the Social Security Administration (SSA) has earnings limits that explore if you have not yet reached your full retirement age. If you earn more than the annual limit, SSA will withhold a portion of your benefits for each dollar you earn over that threshold. Once you reach your full retirement age, you can earn as much as you want without any reduction to your benefits.
The earnings limit changes each year. For 2024, if you are under full retirement age for the entire year, SSA withholds $1 in benefits for every $2 you earn above $23,400. In the year you reach full retirement age, the limit is higher, and the withholding only applies to earnings before the month you turn that age. After the month you reach full retirement age, no earnings limit applies at all.
Key Takeaways
- You can work while receiving Social Security benefits, but earnings above the annual limit will reduce your monthly payment if you have not reached full retirement age.
- The 2024 earnings limit is $23,400 per year if you are under full retirement age for the entire year, with $1 withheld for every $2 earned above that amount.
- Once you reach your full retirement age, you can earn unlimited income without any reduction to your Social Security benefits.
- Self-employment income counts toward the earnings limit, and you must report your earnings to Social Security to avoid overpayment.
- Earnings limits do not explore to other income sources like pensions, investments, or rental income — only wages and self-employment earnings count.
How the earnings limit works before full retirement age
If you are collecting Social Security and you have not yet reached your full retirement age, SSA tracks your annual earnings. The earnings limit applies to wages you earn from employment and net income from self-employment. Earnings from investments, pensions, rental income, or annuities do not count toward the limit.
When you earn more than the limit, SSA withholds benefits using a straightforward formula. For 2024, if you earn $25,400 and the limit is $23,400, you are $2,000 over. SSA withholds $1 for every $2 over the limit, so they withhold $1,000 from your benefits that year. This withholding is spread across your monthly payments, reducing what you receive each month.
You must report your earnings to Social Security. You can do this online through your my Social Security account, by phone at 1-800-772-1213, or by mail. If you do not report earnings and SSA discovers the overpayment later, you will owe the money back.
What happens in the year you reach full retirement age
The earnings limit changes in the year you turn your full retirement age. For 2024, if you reach full retirement age during the year, the limit is $62,160, but this limit only applies to earnings before the month you reach that age. Once you turn your full retirement age, no earnings limit applies for the rest of that year or any year after.
This means if you reach full retirement age in June 2024, SSA only counts your earnings from January through May against the $62,160 limit. Starting in June, you can earn as much as you want. This higher limit in the year you reach full retirement age gives you a transition period where you can work more without losing benefits.
Earnings limits do not explore to other income
Social Security only counts wages and self-employment income toward the earnings limit. Many other income sources do not count at all. If you receive a pension from a previous job, investment income, interest from savings, rental income, or distributions from retirement accounts, none of that reduces your Social Security benefits.
This distinction matters if you are retired and living on multiple income sources. You might have a substantial pension and investment income but still be able to work part-time without hitting the earnings limit. Only the money you earn from working counts.
How to report your earnings to Social Security
You can report your earnings through my Social Security, the online portal where you manage your account. Log in, select "Earnings," and enter your expected or actual earnings for the year. You can update this information at any time.
If you do not have an online account, you can call SSA at 1-800-772-1213 to report by phone. A representative will ask about your earnings and update your record. You can also report by mail by contacting your local Social Security office.
Report your earnings as soon as you know what they will be for the year. If your income changes during the year, you can update your report. Accurate reporting prevents overpayments and keeps your benefits on track.
What happens if you earn more than the limit
If you earn above the limit, SSA does not stop your benefits entirely. Instead, they reduce your monthly payment by withholding a portion. The amount withheld depends on how much you earn over the limit and which earnings limit applies to you.
The withheld amount is not lost forever. When you reach your full retirement age, SSA recalculates your benefit amount to account for the months they withheld benefits. Your monthly payment increases to make up for the months you did not receive the full amount. This is called a "recalculation," and it ensures you eventually receive the full benefits you are may have access to to.
If you think you will earn significantly over the limit, you might consider delaying your Social Security claim until you reach full retirement age. This way, you can work without any earnings limit and receive a higher monthly benefit amount because you waited longer to claim.
Self-employment and the earnings limit
If you are self-employed, your net self-employment income counts toward the earnings limit. Net income means your total business income minus business expenses. You do not count the gross revenue from your business — only the profit after expenses.
For self-employment, SSA uses the net profit from your tax return to determine your earnings. If you file taxes on Schedule C (for sole proprietors) or Schedule F (for farmers), that net profit is what counts. Report this amount when you report your earnings to Social Security.
Self-employment income can make it easier to stay under the earnings limit if your business has significant expenses. A freelancer who earns $30,000 in gross revenue but has $10,000 in business expenses would report $20,000 in net earnings, which might be under the limit depending on the year.
Frequently Asked Questions
Does working affect my Social Security benefits after I reach full retirement age?
No. Once you reach your full retirement age, you can earn any amount without any reduction to your Social Security benefits. There is no earnings limit at that point. Your monthly benefit stays the same regardless of how much you work.
What counts as earnings for the Social Security earnings limit?
Wages from employment and net self-employment income count. Pensions, investment income, rental income, interest, and annuities do not count. Only money you earn from working is subject to the limit.
If Social Security withholds my benefits because I earned too much, do I lose that money?
No. When you reach your full retirement age, SSA recalculates your benefit and increases your monthly payment to account for the months they withheld. You eventually receive the full amount you are may have access to to.
Can I work part-time and still collect Social Security?
Yes. Part-time work may keep your earnings under the annual limit, so you would not lose any benefits. Whether this works depends on how much you earn per hour and how many hours you work. Calculate your expected annual earnings against the current year's limit to see if you would be affected.
What if I did not report my earnings and Social Security finds out later?
SSA will calculate the overpayment — the benefits you received but should not have — and you will owe that money back. You can arrange a repayment plan with Social Security, or they may withhold future benefits to recover the amount. Report your earnings promptly to avoid this situation.