Yes, 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
You are allowed to work while receiving Social Security retirement benefits. However, the Social Security Administration applies an earnings test that reduces your monthly benefit if you earn more than a set limit in the year you claim benefits before reaching your full retirement age. Once you reach full retirement age, you can earn as much as you want without any reduction to your benefits.
The earnings limit changes each year. In 2024, if you have not yet reached full retirement age, 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 — and the reduction applies only to earnings before the month you turn full retirement age.
Key Takeaways
- You can work at any age while collecting Social Security, but benefits are reduced if you earn above the annual limit before reaching full retirement age.
- The 2024 earnings limit is $23,400 for those under full retirement age, and $62,160 in the year you reach full retirement age.
- Once you reach your full retirement age, you can earn unlimited income with no reduction to your Social Security benefits.
- Self-employment income counts toward the earnings limit, and you report it on your tax return each year.
- Any benefits withheld due to earnings are not lost — Social Security recalculates your benefit amount at full retirement age to account for the months benefits were reduced.
How the earnings test works before full retirement age
The earnings test applies only to earned income — wages from a job or net profit from self-employment. It does not count retirement account withdrawals, investment income, pensions, rental income, or other unearned sources. Only what you earn from working matters.
If you are under full retirement age for the entire year, Social Security subtracts $1 from your benefit for every $2 you earn above the limit. This means if you earn $33,400 in 2024 and the limit is $23,400, you are $10,000 over. Social Security withholds $5,000 from your annual benefits. If your monthly benefit is $2,000, they might withhold it for two and a half months, and you would receive benefits for the remaining months of that year.
You do not have to report your earnings to Social Security yourself — your employer reports your wages to the IRS, and Social Security receives that information. If you are self-employed, you report your net earnings on your tax return, and Social Security uses that figure.
What happens in the year you reach full retirement age
The earnings test rules change in the year you turn full retirement age. For that year only, the earnings limit is much higher — $62,160 in 2024 — and it applies only to income earned before the month you reach full retirement age. Once you turn full retirement age, you can earn any amount for the rest of that year without any reduction.
This means if you turn full retirement age in June 2024, Social Security counts only your earnings from January through May against the $62,160 limit. Income you earn from June onward does not affect your benefits at all, even if you earn $100,000 in those remaining months.
No earnings limit once you reach full retirement age
After the month you reach your full retirement age, the earnings test disappears entirely. You can work full-time, part-time, or start a business, and your Social Security benefit stays the same. This applies for the rest of your life — there is no upper age limit on how much you can earn.
This is one reason some people delay claiming Social Security until their full retirement age or beyond. If you plan to keep working and earning a substantial income, waiting removes the risk of benefit reductions and also increases your monthly benefit amount for each year you delay.
How withheld benefits are handled at full retirement age
If Social Security withheld part of your benefits because you earned too much before reaching full retirement age, that money is not gone. When you reach full retirement age, Social Security recalculates your benefit using a method called the Government Pension Offset adjustment, which accounts for the months your benefits were reduced.
The recalculation increases your monthly benefit going forward to partially make up for the months you did not receive a full payment. You will not receive a lump sum for the withheld months, but your ongoing monthly benefit will be higher than it would have been if you had not worked.
Self-employment and the earnings test
If you are self-employed, your net profit from your business counts toward the earnings limit. You calculate net profit by subtracting business expenses from gross income. You report this figure on Schedule C of your tax return, and Social Security uses that same number for the earnings test.
The earnings test applies to your net self-employment income in the year you earn it, not when you receive payment. If you invoice a client in December 2024 but do not receive payment until January 2025, the income counts in 2024 for the earnings test purposes.
Planning your work and benefits strategy
If you are thinking about working while collecting Social Security, consider your full retirement age and your expected earnings. If you are several years away from full retirement age and expect to earn well above the limit, the benefit reductions may be substantial. In that case, you might delay claiming Social Security until you reach full retirement age or until you plan to work less.
If you are close to full retirement age or expect to earn only slightly above the limit, working while collecting may make sense. You will receive some benefits when ready, and the withheld amounts will be recalculated into a higher monthly benefit once you reach full retirement age.
You can contact Social Security directly to discuss your specific situation. They can tell you your full retirement age, estimate how much your benefit would be reduced based on your expected earnings, and help you understand whether claiming now or waiting makes more sense for your circumstances.
Frequently Asked Questions
Does part-time work count toward the earnings limit?
Yes. All earned income — whether from full-time work, part-time work, or self-employment — counts toward the earnings test limit. The number of hours you work does not matter, only the total amount you earn in the year.
What if I earn less than the limit one year but more the next?
The earnings test is applied each year separately. If you earn $20,000 in 2024 (below the $23,400 limit) and $30,000 in 2025, your 2024 benefits are not reduced, but your 2025 benefits are reduced because you exceeded the 2025 limit. Each year stands on its own.
Do I have to tell Social Security when I start working?
You do not have to notify Social Security, but you should report your expected earnings when you claim benefits so they can estimate your benefit amount accurately. After that, your employer or tax return reports your actual earnings to the IRS, and Social Security receives that information automatically.
Can I work for someone else and also be self-employed?
Yes. Both your W-2 wages from an employer and your net self-employment income count toward the earnings limit. Add them together to see if you exceed the annual limit.
What types of income do not count toward the earnings limit?
Investment income, rental income, pension payments, withdrawals from retirement accounts, interest, dividends, and capital gains do not count. Only income from work — wages and self-employment profit — affects your Social Security benefits under the earnings test.