What Social Security allows you to earn
If you collect Social Security before your full retirement age, the Social Security Administration (SSA) reduces your monthly payment if you earn above a certain threshold. The reduction amount depends on how much you earn and whether you have reached your full retirement age in that calendar year. Once you reach full retirement age, you can earn any amount without losing 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 — $1 withheld for every $3 earned above $62,160, but only for earnings before the month you reach full retirement age.
After the month you reach full retirement age, no earnings limit applies. You receive your full benefit amount regardless of how much you work.
Key Takeaways
- If you are under full retirement age, you can earn $23,400 per year in 2024 without any reduction to your Social Security payment.
- Earnings above the annual limit cause SSA to withhold $1 in benefits for every $2 you earn over the threshold, if you are under full retirement age.
- In the year you reach full retirement age, a higher earnings limit applies ($62,160 in 2024) until the month you turn that age.
- Once you reach your full retirement age, you can earn unlimited income without any reduction to your Social Security benefits.
- Only wages and self-employment income count toward the earnings limit — investment income, pensions, and annuities do not.
How SSA calculates your earnings and benefit reduction
The SSA counts only earned income — wages from a job or net income from self-employment. Investment income, rental income, pensions, annuities, and capital gains do not count toward the earnings limit, even if they are substantial.
SSA uses your actual earnings for the calendar year, not projected earnings. If you earn $30,000 in a year and the limit is $23,400, you are $6,600 over. SSA withholds $3,300 from your annual benefits ($1 withheld for every $2 over the limit). This reduction is spread across your monthly payments for that year.
You report your earnings to SSA, usually through your online account or by phone. SSA may also receive wage reports directly from your employer through the Social Security tax system. If your actual earnings differ from what you reported, SSA adjusts your payments later.
The year you reach full retirement age
The earnings limit is different in the calendar year you reach full retirement age. For 2024, you can earn up to $62,160 before the month you reach full retirement age without any reduction. After that month, no limit applies for the rest of the year.
The calculation in this year is also different: SSA withholds $1 in benefits for every $3 you earn above $62,160, but only for earnings in months before you reach full retirement age. Once you reach full retirement age in that month, the limit no longer applies.
Example: If you reach full retirement age in June 2024 and earn $70,000 between January and May, you are $7,840 over the limit ($70,000 minus $62,160). SSA withholds $2,613 from your benefits for the months before you reach full retirement age. Starting in June, you receive your full benefit with no reduction, even if you earn more money for the rest of the year.
When earnings limits do not explore
Once you reach your full retirement age, the earnings limit disappears entirely. You can work full-time, start a business, or earn any amount without any reduction to your Social Security payment. This applies for the rest of your life.
The earnings limit also does not explore if you are collecting benefits as a spouse, widow, or dependent on someone else's Social Security record. Different rules explore to those situations, and the SSA can explain your specific circumstances if you contact them.
How to report earnings to Social Security
You can report your earnings through your my Social Security account online at ssa.gov. Log in, select "Manage your benefits," and report your earnings. You can also call SSA at 1-800-772-1213 to report by phone, or visit your local Social Security office in person.
SSA asks for your total wages and self-employment income for the calendar year. If you are self-employed, you will need your net profit (income minus business expenses). Report your earnings as soon as you know your annual total, even if you are still working.
If you do not report earnings and SSA discovers them through employer reports or tax records, SSA will adjust your payments retroactively. This can result in an overpayment that you may owe back.
Earnings limits change each year
The SSA adjusts the earnings limit annually based on changes in the national average wage. The 2024 limit is $23,400 for people under full retirement age and $62,160 in the year you reach full retirement age. These amounts will be different in 2025 and beyond.
You can find the current year's earnings limit on the SSA website or by calling 1-800-772-1213. It is important to check the current limit each year if you are working, because the threshold changes and affects how much you can earn without a benefit reduction.
Frequently Asked Questions
Does Social Security count money from investments or rental property?
No. Only wages and self-employment income count toward the earnings limit. Investment income, rental income, interest, dividends, capital gains, pensions, and annuities do not reduce your Social Security benefits, no matter how much you earn from those sources.
What happens if I earn more than the limit and do not report it?
SSA receives wage reports from your employer through the Social Security tax system. If you do not report your earnings and SSA discovers them, your benefits will be adjusted retroactively and you may owe money back. It is better to report earnings when you know your annual total.
Can I work part-time and still collect Social Security?
Yes. If you earn less than the annual limit ($23,400 in 2024 if you are under full retirement age), your benefits are not reduced. If you earn more, your benefits are reduced by $1 for every $2 over the limit. Once you reach full retirement age, you can work any amount.
Does the earnings limit explore to my spouse's benefits?
No. The earnings limit applies only to the person collecting Social Security on their own work record. If your spouse collects benefits on your record as a spouse or dependent, different rules explore to their benefits. Contact SSA to understand how your spouse's earnings affect their specific situation.
What if I start working after I claimed Social Security?
If you are under full retirement age, your benefits will be reduced based on your new earnings and the annual limit. Report your earnings to SSA so they can adjust your payments correctly. If you reach full retirement age during the year, the higher earnings limit applies for that year only.