The earnings limit depends on whether you have reached your full retirement age
If you are under your full retirement age, Social Security reduces your benefit by $1 for every $2 you earn above a yearly limit. For 2024, that limit is $23,400. If you reach full retirement age partway through the year, a different limit applies only to earnings before the month you reach that age — $62,160 for 2024, with a $1 reduction for every $3 earned above it.
Once you reach your full retirement age, there is no earnings limit at all. You can work and earn as much as you want without any reduction to your Social Security benefit.
Your full retirement age depends on your birth year. If you were born between 1943 and 1954, it is 66. If you were born between 1955 and 1960, it rises by two months for each year of birth, reaching 67 for those born in 1960 or later. You can find your exact full retirement age on the Social Security Administration website or by calling 1-800-772-1213.
Key Takeaways
- Before full retirement age, Social Security reduces your monthly benefit by $1 for every $2 you earn above $23,400 per year (2024 limit).
- The earnings limit is much higher — $62,160 in 2024 — for the year you reach full retirement age, and only applies to income earned before the month you reach that age.
- Once you reach full retirement age, you can earn unlimited income with no reduction to your benefit.
- Your full retirement age is between 66 and 67, depending on your birth year.
- Social Security counts wages and self-employment income but not pensions, investment returns, or rental income.
What counts as earnings and what does not
Social Security counts wages from a job and net self-employment income toward the earnings limit. If you work for an employer, your W-2 wages count. If you are self-employed, your net profit (after business expenses) counts.
These do not count toward the limit: pensions, annuities, investment income, interest, dividends, capital gains, rental income, or royalties. Nor do bonuses paid in a year after you earned them, or severance pay received after you stop working. If you are unsure whether a specific type of income counts, the Social Security Administration can tell you — call 1-800-772-1213.
How Social Security calculates the reduction
The reduction is straightforward math. If you are under full retirement age and earn $25,400 in 2024, you are $2,000 over the $23,400 limit. Social Security reduces your annual benefit by $1,000 (half of $2,000). That reduction is spread across your monthly checks.
If you reach full retirement age in June 2024 and earn $70,000 between January and May, you are $7,840 over the $62,160 limit. Social Security reduces your annual benefit by $2,613 (one-third of $7,840), applied to your checks from June onward. Once June arrives, no further reduction applies, even if you earn more money for the rest of the year.
You do not have to report your earnings yourself. Your employer reports them to Social Security through tax records, and Social Security calculates the reduction automatically. You will see the adjusted amount in your monthly benefit.
When to tell Social Security about your work plans
You are not required to report earnings in advance, but it is wise to do so if you think you might exceed the limit. Call 1-800-772-1213 or visit your local Social Security office to discuss your expected income. Social Security can estimate what your benefit will be and help you plan.
If you underestimate your earnings and receive more in benefits than you should have, Social Security will ask you to repay the overpayment. The repayment can come from future benefits or, if you prefer, from a check you send in. Starting the conversation early means no surprises later.
Earnings limits change each year
The $23,400 and $62,160 limits for 2024 are adjusted annually based on national wage trends. The new limits are announced in October for the following year. If you are working and receiving benefits, check the Social Security website or call 1-800-772-1213 each January to confirm the current year's limits.
Even though the limits change, the formula does not: $1 reduction for every $2 earned (or $1 for every $3 in the year you reach full retirement age). Once you know the current limit, you can estimate your own reduction.
Work and benefits after full retirement age
Many people continue working after reaching full retirement age. Because there is no earnings limit, your benefit stays the same no matter how much you earn. You also do not have to report your income to Social Security.
If you delayed claiming Social Security past full retirement age, your benefit grows by about 8 percent per year until age 70. Working during those years does not affect that growth — it happens automatically.
Frequently Asked Questions
Do I have to stop working to receive Social Security?
No. You can work and receive benefits at any age. If you are under full retirement age, your benefit will be reduced based on how much you earn. If you have reached full retirement age, you can work as much as you want with no reduction.
What if I earn more than the limit partway through the year?
Social Security calculates the reduction based on your total earnings for the entire year. If you earn $25,000 and the limit is $23,400, the reduction applies to the full year's benefits, even if you earned most of it in one month. Plan your income across the year if you are close to the limit.
Can I appeal if Social Security reduces my benefit?
The reduction is automatic and based on your earnings, so there is nothing to appeal. However, if you believe Social Security made an error in calculating your earnings or the reduction amount, you can contact them to ask for a review. Call 1-800-772-1213 with your pay stubs or tax records.
Does working affect my Medicare coverage?
No. Working does not change your Medicare benefits or your may be able to access. Your health coverage continues regardless of how much you earn.
If I earn too much and lose my benefit, can I get it back?
Your benefit is not lost — it is reduced or temporarily withheld. Once your earnings drop below the limit, or once you reach full retirement age, your full benefit resumes. Social Security recalculates automatically based on your actual earnings each year.