Yes, you can work full time and draw Social Security, but your benefits may be reduced if you are under full retirement age
You are allowed to work and receive Social Security retirement benefits at the same time. However, if you have not yet reached your full retirement age, Social Security will reduce your monthly payment by $1 for every $2 you earn above an annual limit. The limit changes each year — it was $23,400 in 2024, but varies annually. Once you reach full retirement age, you can earn as much as you want without any reduction to your benefits.
The earnings test applies only to wages from work and net income from self-employment. It does not explore to investment income, pensions, annuities, or other retirement income. If you are already at full retirement age when you start drawing, the earnings test does not affect you at all.
Key Takeaways
- If you are under full retirement age and working, Social Security reduces your benefit by $1 for every $2 you earn above the annual limit, which changes each year.
- The earnings limit applies only to wages and self-employment income, not to investment income, pensions, or other retirement savings.
- Once you reach your full retirement age, you can work full time with no reduction to your Social Security benefits, no matter how much you earn.
- If you are born in 1943 or later, your full retirement age is between 66 and 67, depending on your birth year.
- You can contact Social Security to report your earnings and find out how the reduction will affect your specific monthly payment.
How the earnings test reduces your benefits
The reduction is straightforward math. If you earn $5,000 above the annual limit, Social Security subtracts $2,500 from your yearly benefits. If your monthly benefit is $1,500 and the reduction totals $2,500 per year, Social Security will withhold about $208 per month until the reduction is paid back.
Social Security withholds the money from your benefit payments directly — you do not have to pay it back out of pocket. Once you reach full retirement age, any months in which you did not receive a full benefit because of the earnings test are recalculated, and you receive a higher benefit going forward to account for the months you were underpaid.
When the earnings test stops explore
The earnings test ends the month you reach full retirement age. From that point forward, no reduction applies, regardless of how much you earn. Your full retirement age depends on your birth year: if you were born between 1943 and 1954, it is 66; if born between 1955 and 1960, it ranges from 66 and 2 months to 66 and 10 months; if born in 1960 or later, it is 67.
This is one reason some people delay claiming Social Security until they reach full retirement age — if they plan to keep working, they avoid the earnings reduction entirely. Others claim early and accept the reduction because they need the income now.
Self-employment income and the earnings test
If you are self-employed, Social Security counts your net profit (income minus business expenses) toward the earnings limit. You report this on your tax return, and Social Security uses that same figure to determine if the earnings test applies.
The timing matters: Social Security uses the year you earned the money, not the year you report it on your tax return. If you earned $30,000 in 2024 but did not file your 2024 tax return until 2025, Social Security applies the 2024 earnings limit to that $30,000.
Reporting your earnings to Social Security
You are responsible for telling Social Security about your earnings. You can report them online through your Social Security account, by phone at 1-800-772-1213, or in person at your local Social Security office. Social Security also receives wage information from your employer through tax records, so discrepancies are usually caught.
It is a good idea to report your expected earnings when you first claim benefits, especially if you plan to work. This helps Social Security estimate your benefit payment accurately and avoid overpaying you — if you receive more than you are may have access to to because of unreported earnings, you will have to repay the overage.
How working affects your future benefits
Working while drawing Social Security does not reduce your future benefit amount. Your benefit is calculated based on your 35 highest-earning years. If you continue working and earn more than one of your previous years, that higher year replaces a lower one in the calculation, which can actually increase your benefit.
This is different from the earnings test, which temporarily reduces your current payment. The earnings test is a temporary reduction; working and earning more can permanently improve your benefit because it may replace a lower-earning year in your record.
Part-time work and reduced benefits
Part-time work is treated the same as full-time work under the earnings test — it is the total amount you earn that matters, not the number of hours. If you earn $25,000 part-time and the annual limit is $23,400, the $1,600 over the limit triggers the reduction, just as it would if you earned that amount full-time.
Some people work part-time specifically to stay under the annual earnings limit and avoid the reduction. If you are under full retirement age and considering work, calculating your expected earnings against the current year's limit can help you decide whether to work full-time, part-time, or not at all.
Frequently Asked Questions
What is the earnings limit for 2024?
The earnings limit for 2024 is $23,400. If you earn more than that and are under full retirement age, Social Security reduces your benefit by $1 for every $2 over the limit. The limit increases each year based on national wage trends, so check the Social Security website or call 1-800-772-1213 for the current year's figure.
If I work full time and my benefits are reduced, do I get that money back later?
Yes, in a way. Once you reach full retirement age, Social Security recalculates your benefit to account for the months you did not receive a full payment. Your monthly benefit increases going forward, and over time you recover the money that was withheld. However, if you die before reaching full retirement age, you do not recover the withheld amounts.
Does my spouse's work affect my Social Security benefits?
No. The earnings test applies only to the person who is drawing benefits. Your spouse's earnings do not affect your benefit, and your earnings do not affect theirs. Each person's earnings are evaluated separately against the annual limit.
Can I work and draw Social Security if I claimed early?
Yes, but the earnings test will reduce your benefit if you are under full retirement age. If you claimed at 62 and are now 64, the earnings test still applies until you reach your full retirement age. Once you reach that age, the reduction stops even though you claimed early.
What counts as earnings for the earnings test?
Wages from employment and net self-employment income count. Investment income, pensions, annuities, rental income, and interest do not count. Only money you earn from working — either as an employee or business owner — is subject to the earnings test.