You can work and collect Social Security, 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, if you are under your full retirement age and earn more than a set limit, Social Security will reduce your monthly benefit by $1 for every $2 you earn above that threshold. The limit changes each year — it was $23,400 in 2024, but you should check the current year's figure with Social Security directly. Once you reach your full retirement age, you can earn as much as you want without any reduction to your benefits.

The earnings limit applies only to wages from work and net income from self-employment. It does not include pensions, investment income, rental income, or other money you receive. Social Security counts only the money you actually earn, not the money you have saved or inherited.

Key Takeaways

  • If you are under full retirement age and earn more than the annual limit, Social Security reduces your benefit by $1 for every $2 you earn above that amount.
  • The earnings limit applies only to wages and self-employment income, not to pensions, investments, or other sources of money.
  • Once you reach your full retirement age, you can work and earn any amount without your benefits being reduced.
  • You must report your earnings to Social Security so they can calculate your benefit correctly.
  • If you are self-employed, you report your net profit (income minus business expenses) rather than your gross revenue.

How the earnings limit works before full retirement age

Social Security uses a straightforward formula to calculate the reduction. For every $2 you earn above the annual limit, your benefit goes down by $1. If the limit is $23,400 and you earn $25,400, you are $2,000 over the limit. Social Security would reduce your annual benefit by $1,000 — which means $83.33 less per month on average.

The reduction applies for the entire year you are over the limit. If you turn 66 in June and your full retirement age is 66, the earnings limit applies only to the months before you turn 66. After that month, no reduction applies, even if you earn a large amount for the rest of the year.

You do not lose the money permanently. Social Security recalculates your benefit at your full retirement age to account for the months your benefit was reduced. This means you will receive higher monthly payments later to make up for the reduction, though the total amount you receive over your lifetime may still be less than if you had not worked.

What counts as earnings and what does not

Social Security counts only money you earn from work. This includes wages from a job, bonuses, commissions, and tips. If you are self-employed, you report your net profit — the money left after you subtract business expenses from your gross income. You do not count the full revenue of your business, only what you actually keep.

Social Security does not count pensions, annuities, investment income, interest, dividends, rental income, or money from savings. It also does not count money you receive from insurance settlements, inheritances, or gifts. These sources of income do not affect your benefits, no matter how much you receive.

If you work for a government agency and did not pay Social Security taxes on that job, you may be subject to the Government Pension Offset or Windfall Elimination Provision, which are separate rules. These affect how your benefit is calculated, not whether you can work.

Reporting your earnings to Social Security

You are responsible for telling Social Security about your earnings. You can report them online through your Social Security account, by phone at 1-800-772-1213, or in person at your local Social Security office. You do not need to report every paycheck — you report your total expected earnings for the year.

If your actual earnings turn out to be different from what you reported, you can correct it. Social Security will adjust your benefit based on your actual earnings when you file your tax return or when you report the change. If you were paid too much because you underestimated your earnings, you will owe the money back, but Social Security usually takes it from future benefit payments rather than asking for a lump sum.

If you are self-employed, you report your net profit from Schedule C of your tax return. You should keep records of your income and expenses so you can report accurately to Social Security.

Working after you reach full retirement age

Once you reach your full retirement age, the earnings limit no longer applies. You can work full-time and earn any amount without your Social Security benefit being reduced. Your benefit amount stays the same each month, regardless of how much you earn.

If you have not yet claimed Social Security and you are working past your full retirement age, you have the option to delay claiming. For each year you delay claiming between your full retirement age and age 70, your monthly benefit increases by 8 percent. This is called a delayed retirement credit. If you are already collecting benefits and you continue working, your benefit does not increase automatically — it stays the same.

Working before you claim Social Security

If you have not yet claimed Social Security but you are working, the earnings limit still applies in the year you claim benefits. This is true even if you claim at your full retirement age. For example, if your full retirement age is 66 and you claim benefits in June of the year you turn 66, the earnings limit applies to the income you earn from January through May. After June, no limit applies.

This is one reason some people delay claiming until later in the year if they know they will earn a lot of money early in the year. By claiming after they stop working or reduce their hours, they can avoid or reduce the benefit reduction.

What happens if you earn more than expected

If you report your expected earnings and then earn more than you said, Social Security will adjust your benefit. They may reduce your benefit for the rest of the year, or they may ask you to repay some of the benefits you received. The amount you owe is called an overpayment.

If you receive an overpayment notice, you have options. You can repay the full amount, set up a payment plan, or request a waiver if you believe you were not at fault for the overpayment. Social Security can also take the overpayment from your future benefits if you do not repay it voluntarily. If you disagree with the overpayment amount, you can request a reconsideration or appeal.

Frequently Asked Questions

Can I work part-time and still collect Social Security?

Yes. If you earn less than the annual limit, your benefit is not reduced at all. If you earn more than the limit, your benefit is reduced only by the amount over the limit. Part-time work that keeps you under the limit has no effect on your benefits.

Does my spouse's earnings affect my Social Security benefit?

No. Your spouse's earnings do not count toward your earnings limit. Each person who collects Social Security has their own earnings limit. However, if your spouse is receiving a benefit based on your record, their benefit may be reduced if they earn over the limit.

What if I am self-employed and my business loses money?

If your net profit is negative (you had a loss), you report that to Social Security. A loss does not count as earnings, so it does not reduce your benefit. You only report earnings when you have a profit.

Do I have to stop working when I turn 66?

No. You can continue working as long as you want. Once you reach your full retirement age, your earnings do not affect your Social Security benefit, so you can work full-time without any reduction.

If my benefit was reduced because I worked, do I get that money back later?

Partially. Social Security recalculates your benefit at your full retirement age to account for the months your benefit was reduced. Your monthly payment increases, but the total amount you receive over your lifetime may still be less than if you had not worked, depending on how long you live.