Your earnings limit depends on whether you have reached full retirement age
Social Security reduces your monthly payment if you earn above a certain amount before you reach full retirement age. The reduction stops once you hit that age, no matter how much you earn. If you have already reached full retirement age, you can earn any amount without losing benefits.
The earnings limit and the reduction rate change each year. For 2024, if you are under full retirement age for the entire year, Social Security reduces your benefit by $1 for every $2 you earn above $23,400. In the year you reach full retirement age, the limit is higher ($62,160 for earnings before the month you turn full retirement age), and the reduction is $1 for every $3 you earn above that amount.
These dollar amounts are set by federal law and adjust annually based on wage growth. You should check the Social Security Administration website or call 1-800-772-1213 to confirm the current year's limits before you start working or increase your hours.
Key Takeaways
- If you are under full retirement age, Social Security reduces your monthly payment by $1 for every $2 you earn above the annual limit, which was $23,400 in 2024.
- Once you reach your full retirement age, you can earn unlimited income without any reduction to your Social Security payment.
- The earnings limit applies only to wages and self-employment income, not to pensions, investments, rental income, or other sources.
- Social Security counts earnings for the calendar year, so you can earn more in some months and less in others as long as your annual total stays under the limit.
- You must report your earnings to Social Security; the agency does not automatically know how much you have earned from your employer.
What counts as earnings under Social Security rules
Social Security counts wages from a job and net self-employment income toward your earnings limit. If you work for an employer, your gross wages count, not what you take home after taxes. If you are self-employed, only your net profit counts — the amount after business expenses.
Many types of income do not count toward the limit. Pensions from a former job, investment income, interest, dividends, rental income, and capital gains are all ignored. Bonuses and severance pay count as wages in the year you receive them. Vacation pay you earned in a previous year but receive after you start Social Security counts in the year you receive it, not when you earned it.
If you work for a family business or receive income from a business you own, Social Security may ask for documentation to verify the amount. Keep pay stubs, tax returns, and business records for at least three years.
How Social Security calculates the reduction to your payment
The reduction is straightforward math. If you are under full retirement age and earn $30,000 in a year when the limit is $23,400, you have earned $6,600 over the limit. Social Security reduces your annual benefit by $3,300 (half of $6,600). That reduction is spread across your monthly payments for the year.
If your monthly benefit is $1,500 and the annual reduction is $3,300, Social Security withholds roughly $275 per month. The exact amount depends on how your payments are scheduled. If you earn more in some months than others, you can request that Social Security recalculate your withholding to match your actual monthly earnings, though this requires contacting them directly.
In the year you reach full retirement age, the calculation changes. Only earnings before the month you turn full retirement age count toward the limit. If you turn 67 in June, only earnings from January through May explore. Starting in June, you can earn any amount.
Reporting your earnings to Social Security
You are responsible for telling Social Security how much you have earned. The agency does not automatically receive this information from your employer. You can report earnings online through your my Social Security account, by phone at 1-800-772-1213, or by mail using Form SSA-777.
You should report your earnings within three months of the end of the year in which you earned them. If you do not report and Social Security later discovers you earned more than the limit, you may owe back benefits. The agency will reduce future payments to recover the overpayment, or you can arrange to repay the amount directly.
If you expect to earn close to or above the limit, report as you go rather than waiting until the end of the year. This way, Social Security can adjust your withholding early and you will not face a large reduction later or owe money back.
Earnings limits for people receiving benefits on someone else's record
If you receive benefits as a spouse, ex-spouse, or dependent child based on someone else's Social Security record, you have your own separate earnings limit. The same annual limit applies to you as applies to other beneficiaries under full retirement age. Once you reach full retirement age, the same rule holds: you can earn any amount.
Your earnings do not affect the primary worker's benefit. If you are a spouse or ex-spouse and you work, only your own payment is reduced, not theirs. If you are a child, your earnings affect only your own benefit.
Planning work around the earnings limit
If you are close to the earnings limit, you have a few options. You can reduce your hours or take unpaid leave in some months to stay under the limit. You can delay starting Social Security until you reach full retirement age, at which point the limit no longer applies. You can also ask your employer about bonuses or raises that take effect after you reach full retirement age, since those will not count against you.
Some people choose to work part-time or seasonally to keep earnings below the limit while they are still under full retirement age. Others work full-time knowing that Social Security will reduce their payment, and they accept that trade-off. There is no penalty for earning over the limit beyond the monthly reduction — you do not lose benefits permanently, and your future benefit amount is not affected.
If you are self-employed, you have more control over when you recognize income. Consult a tax professional about the timing of business expenses and income recognition, keeping in mind both tax rules and Social Security earnings limits.
What happens after you reach full retirement age
Once you reach your full retirement age, the earnings limit disappears entirely. You can work full-time, earn six figures, or start a business without any reduction to your Social Security payment. This is true for the rest of your life.
Your monthly benefit amount does not increase because you worked while receiving benefits before full retirement age. However, if you continue working after reaching full retirement age, your benefit may increase at your next annual cost-of-living adjustment if your recent earnings are higher than some of your earlier years. Social Security recalculates your benefit every year using your highest 35 years of earnings.
Frequently Asked Questions
Do I have to report earnings if I am self-employed?
Yes. Self-employment income counts toward the earnings limit just like wages do. You must report your net self-employment income (earnings after business expenses) to Social Security. Keep records of your business income and expenses to support what you report.
What if I earn money in one month but not others?
Social Security counts your total earnings for the calendar year, not month by month. You can earn $5,000 in one month and nothing in another, and only your annual total matters. However, if you expect uneven earnings, you can ask Social Security to use a monthly test instead, which may result in a smaller reduction.
Does my spouse's earnings affect my Social Security?
No. Each person's earnings are counted separately. If you are both receiving Social Security, each of you has your own earnings limit. Your spouse's income does not affect your benefit, and yours does not affect theirs.
Can I work and receive Social Security at the same time?
Yes, but if you are under full retirement age, your benefit will be reduced if you earn above the annual limit. Once you reach full retirement age, you can work and receive your full benefit with no reduction.
What if Social Security overpays me because I did not report earnings?
You will owe the money back. Social Security will reduce your future payments to recover the overpayment, or you can repay the amount in a lump sum. Report earnings promptly to avoid this situation.