Yes, you can work and collect Social Security, but your earnings may reduce your benefit amount

You are allowed to work while receiving Social Security retirement benefits. However, if you claim benefits before your full retirement age and earn above a certain amount, Social Security will temporarily reduce your monthly payment. The reduction applies only until you reach your full retirement age — after that, you can earn as much as you want without any reduction to your benefits.

The earnings limit and the amount of the reduction change each year. The exact numbers depend on whether you have reached your full retirement age yet and which year you are asking about. Social Security publishes the current year's limits on their website, and you can also call them at 1-800-772-1213 to ask what this year's threshold is.

Key Takeaways

  • If you claim Social Security before your full retirement age and earn more than the annual limit, Social Security withholds $1 from your benefit for every $2 you earn above that threshold.
  • The earnings limit applies only to wages and self-employment income — it does not include pensions, investment income, rental income, or other types of earnings.
  • Once you reach your full retirement age, the earnings limit no longer applies, and you can work and earn without any reduction to your benefits.
  • In the year you reach your full retirement age, a different (higher) earnings limit applies only to income earned before the month you turn full retirement age.

How the earnings limit works before your full retirement age

Social Security counts only wages from employment and net self-employment income. It does not count retirement account withdrawals, investment gains, rental income, pensions from other sources, or money from selling a home or other assets.

If your earnings exceed the annual limit, Social Security reduces your benefit by $1 for every $2 you earn above that amount. For example, if the limit is $23,400 and you earn $25,400, you are $2,000 over the limit. Social Security would withhold $1,000 from your annual benefits (half of $2,000). This reduction is spread across your monthly payments throughout the year.

The reduction is temporary. Once you reach your full retirement age, Social Security stops withholding money from your benefits, even if you continue working and earning above the previous limit.

The year you reach your full retirement age

In the calendar year you turn your full retirement age, a higher earnings limit applies — but only to income you earn before the month you reach that age. Once you turn full retirement age, no earnings limit applies for the rest of that year or any year after.

For example, if you turn full retirement age in June, the higher earnings limit applies only to what you earn from January through May. Starting in June, you can earn any amount without affecting your benefits.

What counts as earnings and what does not

Social Security counts wages you receive as an employee and net profit from self-employment. It does not count:

  • Withdrawals from retirement accounts (401(k), IRA, pension)
  • Interest, dividends, or capital gains from investments
  • Rental income from property
  • Annuity payments
  • Money from selling a home or other assets
  • Royalties or licensing fees (unless you are still actively involved in the business that produces them)

If you are unsure whether a particular type of income counts, you can contact Social Security directly. They can tell you whether a specific payment would affect your benefits.

How to report your earnings to Social Security

You do not have to report your earnings to Social Security every month. Instead, you report your expected earnings when you first claim benefits, and then you file an annual earnings report. Social Security will tell you when and how to file this report — usually by mail or through their online account at ssa.gov.

If your actual earnings end up being different from what you reported, Social Security adjusts your benefits accordingly. If you earned less than expected, you may receive a larger payment. If you earned more, they may withhold additional money from your benefits.

It is important to report accurately. If you underreport your earnings, Social Security may ask you to repay the overpayment later.

Working past your full retirement age

Once you reach your full retirement age, you can work and earn any amount without any reduction to your Social Security benefits. This is true whether you are working full-time, part-time, or self-employed.

If you have not yet claimed Social Security by the time you reach your full retirement age, you have the option to continue working and delay your claim. Delaying your claim increases your monthly benefit amount by about 8 percent per year until age 70, when the increase stops.

Frequently Asked Questions

If I work and my benefits are reduced, do I lose that money permanently?

No. The reduction is temporary and applies only while you are under your full retirement age and earning above the limit. Once you reach your full retirement age, Social Security recalculates your benefit to account for the months when it was reduced. You do not receive back pay for those months, but your benefit amount increases going forward.

Does part-time work count toward the earnings limit?

Yes. Social Security counts all wages from employment, whether you work full-time or part-time. It is the total amount you earn in a calendar year that matters, not how many hours you work.

What if I am self-employed — how do I report my earnings?

Self-employed income is counted the same way as wages. You report your net self-employment income (after business expenses) on your annual earnings report to Social Security. Keep records of your income and expenses so you can report accurately.

Can I work while collecting Social Security Disability Insurance (SSDI)?

SSDI has different rules than retirement benefits. You can work and earn a limited amount through the Trial Work Period and Extended may be able to access Period without losing your benefits, but the rules are more complex. Contact Social Security directly to understand how work affects your specific SSDI case.

If I delay claiming Social Security to keep working, will my benefit be higher?

Yes. For each year you delay claiming between your full retirement age and age 70, your monthly benefit increases by about 8 percent. This increase is permanent and applies for the rest of your life, so delaying can result in a significantly higher monthly payment if you live into your 80s or beyond.