The earnings limit depends on whether you have reached your full retirement age
If you are under your full retirement age for the entire year, Social Security reduces your benefit by $1 for every $2 you earn above the annual limit. For 2024, that limit is $23,400. The reduction stops once you reach your full retirement age.
If you reach your full retirement age during the year, a different rule applies only to earnings before the month you reach that age. For those months, Social Security reduces your benefit by $1 for every $3 you earn above $62,160 (the 2024 limit for this group). Once you reach full retirement age, you can earn any amount with no reduction to your benefit.
After you reach full retirement age, there is no earnings limit at all. You collect your full benefit regardless of how much you work.
Key Takeaways
- If you are under full retirement age, you can earn up to $23,400 per year before Social Security reduces your monthly benefit by $1 for every $2 over that amount.
- The earnings limit changes each year, so check the current year's limit on the Social Security Administration website before you plan your income.
- Once you reach your full retirement age, you can work and earn any amount without any reduction to your Social Security benefit.
- Social Security counts only wages and self-employment income toward the earnings limit — not investment income, pensions, or annuities.
- You must report your earnings to Social Security; they do not automatically know how much you made.
What counts as earnings that triggers the limit
Social Security counts wages from a job and net income from self-employment. If you are an employee, your employer reports your wages to Social Security automatically through tax withholding. If you are self-employed, you report your net profit (income minus business expenses) on your tax return, and Social Security uses that figure.
Income that does not count toward the earnings limit includes investment income, interest, dividends, capital gains, rental income, pensions, annuities, and royalties. If you live on investment returns or a pension while working part-time, those other income sources do not affect your Social Security benefit.
How to report your earnings to Social Security
You are responsible for telling Social Security how much you earned. You can report your earnings online through your my Social Security account at ssa.gov, by phone at 1-800-772-1213, or by visiting a local Social Security office in person.
Social Security will ask for your total wages or net self-employment income for the year. Have your most recent pay stub or tax documents ready. If you report online, you can do it anytime; by phone or in person, call ahead to find your local office hours.
You do not have to wait until the end of the year to report. Many people report as they go, which helps Social Security adjust your benefit payments correctly and avoid overpayments that you would have to repay later.
What happens if you earn more than the limit
If you are under full retirement age and earn more than the annual limit, Social Security withholds part of your benefit. The withholding is automatic — Social Security calculates it based on your reported earnings and adjusts your monthly payment.
For example, if the limit is $23,400 and you earn $30,000, you are $6,600 over the limit. Social Security withholds $3,300 (half of the overage) from your annual benefits. This might mean your monthly check is reduced, or if the withholding is large enough, you receive no benefit for several months.
The withholding is not a penalty or a loss of money — it is a temporary reduction. Once you reach full retirement age, Social Security recalculates your benefit to account for the months you did not receive a payment, and your benefit amount increases to make up for it.
The earnings limit changes each year
Social Security adjusts the earnings limit annually based on changes in national average wages. The 2024 limit is $23,400 for people under full retirement age all year, and $62,160 for those reaching full retirement age during the year. The 2025 limits have not yet been announced but will be posted on ssa.gov by November of the prior year.
If you plan to work while collecting Social Security, check the current year's limit before you take the job or increase your hours. A small change in earnings can mean the difference between no reduction and a significant one.
Deciding whether to claim early and work
Some people claim Social Security before full retirement age specifically to work. This strategy makes sense if you plan to earn significantly more than the limit, because the earnings reduction is temporary — your benefit increases later to account for the withheld months. However, your benefit amount itself is permanently lower if you claim before full retirement age, even after the earnings limit no longer applies.
If you think you will earn above the limit for several years, you might come out ahead by waiting to claim until you reach full retirement age or later. A financial advisor or the Social Security Administration can help you compare the long-term impact of claiming early versus waiting.
Frequently Asked Questions
Do I have to report my earnings every month, or just once a year?
You report your total earnings for the year, not monthly. You can report once at the end of the year or update Social Security as you go. Reporting early helps avoid overpayments and ensures your benefit is adjusted correctly from the start.
What is my full retirement age?
Full retirement age depends on your birth year. For people born in 1943 to 1954, it is 66. For those born in 1955 to 1960, it ranges from 66 and 2 months to 66 and 10 months. For those born in 1960 or later, it is 67. You can find your exact age on your Social Security statement or at ssa.gov.
If I work part-time and earn under the limit, does my benefit stay the same?
Yes. If you earn less than the annual limit, there is no reduction to your benefit, regardless of how much under the limit you are. You can earn $23,399 and receive your full benefit with no withholding.
Does self-employment income count the same way as wages?
Yes. Social Security counts your net self-employment income (profit after business expenses) the same way it counts wages. You report it on your tax return, and Social Security uses that figure toward the earnings limit.
Can I work for someone else and also be self-employed?
Yes. Social Security adds your wages and self-employment income together to determine whether you are over the limit. If you earn $15,000 in wages and $10,000 in self-employment income, your total is $25,000, which exceeds the $23,400 limit by $1,600.