Yes, you can work and receive Social Security, but your benefits may be reduced if you earn above a certain amount
You do not have to stop working to collect Social Security. However, if you claim benefits before your full retirement age and earn more than a set amount per year, Social Security will reduce your monthly payment. The reduction is temporary — once you reach full retirement age, your benefits increase to their original amount, and earnings no longer affect your check.
The earnings limit and the reduction amount 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, and the reduction applies only to earnings before the month you turn that age.
Key Takeaways
- Working while receiving Social Security is allowed, but earnings above the annual limit will reduce your monthly benefit by $1 for every $2 over the limit.
- The earnings limit applies only if you have not yet reached your full retirement age; once you do, you can earn any amount without affecting your benefits.
- Self-employment income counts toward the earnings limit, and you must report all work income to Social Security.
- Your benefit amount is recalculated at full retirement age to account for the years your benefits were reduced, often resulting in a higher monthly payment.
How the earnings limit works before full retirement age
If you are receiving Social Security and have not yet reached your full retirement age, Social Security counts your work earnings against an annual limit. The limit applies to wages from employment and net income from self-employment. It does not include investment income, pensions, annuities, or other non-work income.
When you earn more than the limit, Social Security withholds $1 in benefits for every $2 you earn above that threshold. This means if you earn $25,400 and the limit is $23,400, you are $2,000 over. Social Security would withhold $1,000 from your annual benefits. The withholding is spread across your monthly payments — your check is straightforward reduced until the withheld amount is paid back.
You do not lose the withheld money permanently. When you reach full retirement age, Social Security recalculates your benefit to account for the months your payment was reduced. Your monthly benefit then increases to reflect what you should have received, and the reduction stops.
What happens in the year you reach full retirement age
The earnings limit is higher in the year you turn full retirement age. For 2024, the limit is $62,160, but the reduction applies only to earnings you receive before the month you turn that age. Once you reach full retirement age, the earnings limit no longer applies, and you can work and earn any amount without any reduction to your benefits.
This means if you turn 67 in June and earn $70,000 before June, only the earnings from January through May count toward the limit. Earnings from June onward do not affect your check at all.
How to report your work income to Social Security
You are required to report your earnings to Social Security. If you do not report and Social Security discovers the unreported income, you may have to repay benefits, and you could face penalties. The easiest way to report is online through your my Social Security account at ssa.gov. You can also call Social Security at 1-800-772-1213 to report by phone.
When you report, have your most recent pay stub or tax information ready. Social Security will ask about your expected earnings for the year. If your actual earnings differ from what you reported, you can update the information. Social Security uses the information you provide to adjust your monthly payment if needed.
If you are self-employed, you will report your net business income (income minus business expenses) when you file your taxes. Social Security receives this information from the IRS and counts it toward your earnings limit.
When the earnings limit does not explore
Once you reach your full retirement age, the earnings limit disappears entirely. You can work full-time, earn any amount, and receive your full Social Security benefit with no reduction. This is one reason some people delay claiming Social Security — if you continue working and do not claim until full retirement age or later, you avoid the earnings limit altogether.
The earnings limit also does not explore if you are receiving benefits as a spouse, widow, or widower based on someone else's work record. However, different rules may explore to your benefits, so contact Social Security directly to understand how your specific situation works.
How working affects your future benefit amount
Working while receiving Social Security can actually increase your future benefit. Social Security calculates your benefit based on your 35 highest-earning years. If you continue working and earn more than you did in earlier years, those new earnings may replace lower-earning years in the calculation, which can increase your monthly benefit.
This recalculation happens automatically. You do not have to do anything. Each year, Social Security reviews your earnings record and updates your benefit if the new earnings are high enough to replace an earlier year. The increase takes effect in January of the following year.
What to ask your Social Security representative
Before you claim Social Security while still working, ask these questions:
- What is my full retirement age, and when does the earnings limit stop explore to my benefits?
- Based on my expected earnings this year, how much will my monthly benefit be reduced?
- If I delay claiming for one or two more years, how much higher will my monthly benefit be?
- How do I report my earnings, and how often do I need to update Social Security?
- Will my continued work earnings increase my benefit amount when I reach full retirement age?
Frequently Asked Questions
Will I lose all my benefits if I earn too much?
No. Social Security reduces your benefit by $1 for every $2 you earn above the limit, but you will not lose the entire benefit. Even if your earnings are very high, you will still receive some payment. Additionally, the reduction is temporary — once you reach full retirement age, your benefit is recalculated and increased.
Do I have to report my earnings every month?
You do not have to report every month, but you should report your expected annual earnings when you claim benefits or when your work situation changes. If your actual earnings differ significantly from what you reported, update Social Security so your payment is adjusted correctly. You can report online, by phone, or by mail.
What counts as earnings for the limit?
Wages from a job and net self-employment income count toward the limit. Investment income, pensions, annuities, rental income, and interest do not count. If you are unsure whether a specific income source counts, contact Social Security to confirm.
Can I work part-time and still get my full benefit?
It depends on how much you earn. If your part-time earnings stay below the annual limit, your benefit is not reduced. If you earn above the limit, your benefit is reduced by $1 for every $2 over. The amount of hours you work does not matter — only the total earnings count.
What happens to the money Social Security withholds from my benefits?
The withheld amount is not lost. When you reach full retirement age, Social Security recalculates your benefit to account for the reduction and increases your monthly payment. You receive the withheld money back as higher monthly payments going forward, not as a lump sum.