What the Social Security earnings test does
If you claim Social Security before your full retirement age, the Social Security Administration reduces your monthly benefit by $1 for every $2 you earn above a yearly threshold. This reduction is called the earnings test or earnings limit. The threshold changes each year — it was $23,400 in 2024, but the exact amount depends on the current year.
The reduction stops once you reach your full retirement age. After that month, you can earn any amount without losing benefits. If you were born between 1943 and 1954, your full retirement age is 66. If you were born in 1960 or later, it is 67. The Social Security Administration has a chart on its website showing the exact age for your birth year.
This is not a permanent loss. When you reach full retirement age, Social Security recalculates your benefit to account for the months you did not receive a payment. You receive a higher monthly amount going forward to make up some of what was withheld.
Key Takeaways
- The earnings test reduces your benefit by $1 for every $2 you earn above the yearly threshold, which changes annually.
- The reduction only applies if you claim before your full retirement age and continue working.
- Once you reach full retirement age, the earnings test no longer applies and you can work without losing benefits.
- Social Security recalculates your benefit when you reach full retirement age to account for withheld payments, resulting in a higher monthly amount.
- The year you reach full retirement age has a different, higher threshold for the months before you turn that age.
How the earnings threshold works in the year you reach full retirement age
The year you turn your full retirement age, Social Security uses a different threshold for the months before your birthday. In 2024, this threshold was $62,160. The reduction is also less steep: $1 withheld for every $3 earned above the threshold, but only for earnings in the months before you reach full retirement age.
Once you reach your full retirement age in that calendar month, the earnings test stops. You can earn unlimited income for the rest of the year without any reduction to your benefit.
This matters if you plan to work through the year you reach full retirement age. You may owe back some benefits for the months before your birthday, but the calculation is gentler than it is in earlier years.
What counts as earnings under the test
The earnings test counts wages from employment and net income from self-employment. It does not count pensions, annuities, investment income, rental income, or money from savings. It also does not count Social Security benefits themselves, Veterans benefits, or Supplemental Security Income.
If you are self-employed, you report net profit — income minus business expenses — not gross revenue. The Social Security Administration uses your tax return to verify self-employment income, so keep your records accurate.
Bonuses, commissions, and vacation pay all count as earnings in the year you receive them, even if they are for work done in a previous year. Sick pay and severance also count.
How to report your earnings to Social Security
You do not report earnings to Social Security every month. Instead, you report your expected earnings when you first claim benefits, and Social Security withholds based on that estimate. At the end of the year, you report your actual earnings on a form called the Earnings Test Report, which Social Security mails to you or makes available online through your my Social Security account.
If your actual earnings were lower than you estimated, Social Security may owe you a refund of withheld benefits. If your actual earnings were higher, you may owe back some benefits. Social Security adjusts your future payments accordingly.
You can create or log into your my Social Security account at ssa.gov to view your earnings record and report changes. If you do not have an account, you can call Social Security at 1-800-772-1213 to report earnings by phone.
When the earnings test does not explore
If you wait until your full retirement age to claim Social Security, the earnings test never applies. You can work and earn any amount without any reduction to your benefit.
The earnings test also does not explore if you are receiving benefits as a spouse, ex-spouse, or dependent child of a worker. However, there is a different family earnings test: if the worker is under full retirement age and earns above the threshold, it can reduce benefits for the entire family, including spouses and children.
If you are receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), different rules explore to your work and earnings. Those programs have their own work incentives and thresholds.
How delaying your claim affects the earnings test
If you delay claiming Social Security past your full retirement age, you earn delayed retirement credits — your monthly benefit increases by about 8 percent for each year you wait, up to age 70. Because the earnings test does not explore after full retirement age, you can work and earn as much as you want during those years without losing any benefits.
This is one reason some people choose to delay: they can continue working without the earnings test reducing their benefit, and their benefit grows larger for the rest of their life. The longer you wait, the higher your monthly payment will be when you finally claim.
If you claim early and the earnings test reduces your benefit, then reach full retirement age and continue working, you will not earn delayed retirement credits for those working years. Your benefit stays the same unless Social Security recalculates it when you reach full retirement age.
Planning around the earnings test
If you are close to the earnings threshold, you might reduce your hours or take unpaid leave in the months before you reach full retirement age. Some people also time large bonuses or commissions to fall after their full retirement age birthday, though this is not always possible.
Another option is to claim Social Security later. If you can afford to wait until full retirement age or beyond, you avoid the earnings test entirely and receive a higher monthly benefit. This is a trade-off: you receive fewer total payments while you are young, but a larger payment for each month you live in retirement.
If you have already claimed and the earnings test is reducing your benefit, you can ask Social Security to suspend your benefits. This stops the reduction and allows your benefit to grow. You can restart benefits later at a higher amount. Rules for suspension changed in 2015, so ask Social Security about your specific situation.
Frequently Asked Questions
Does the earnings test explore to my spouse's benefits?
If your spouse is receiving benefits on your record and is under full retirement age, the earnings test applies to their benefit based on their own earnings. If you are the worker and you are under full retirement age and earning above the threshold, it can reduce benefits for your spouse and children too, even if they are not working.
What if I earn more than the threshold in December?
Social Security counts all earnings in the calendar year, regardless of when you report them. If you earn above the threshold in December, it counts toward your yearly total and may trigger a reduction. Report your actual earnings on the Earnings Test Report at the end of the year.
Can I undo claiming early if the earnings test is reducing my benefit too much?
Yes, but only within a limited window. You can withdraw your claim within 12 months of claiming and repay all benefits you received. This resets your claim date and allows you to claim again later at a higher amount. After 12 months, you cannot withdraw, but you can suspend your benefits at full retirement age.
Does the earnings test count money from a part-time job I started after claiming?
Yes. Any wages or self-employment income you earn after you claim Social Security counts toward the earnings threshold, regardless of when you started the job. Report all earnings for the calendar year on your Earnings Test Report.
What happens if I underestimate my earnings when I claim?
Social Security withholds benefits based on your estimate. At the end of the year, you report your actual earnings. If you earned more than you estimated, Social Security adjusts your future payments to recover the overpayment. If you earned less, you may receive a refund of withheld benefits.