The earnings limit depends on whether you have reached full retirement age
If you are under full retirement age and collecting Social Security, there is a limit on how much you can earn before your benefits are reduced. For 2024, you can earn up to $23,400 per year without losing any benefits. If you earn more than that, Social Security deducts $1 from your benefit for every $2 you earn above the limit.
The year you reach full retirement age has a different rule. From January through the month before you turn full retirement age, you can earn up to $62,160 before benefits are reduced. After the month you reach full retirement age, there is no earnings limit at all — you can earn any amount and keep your full benefit.
Once you pass full retirement age, earnings never affect your Social Security payment again, no matter how much you make.
Key Takeaways
- If you are under full retirement age, you can earn $23,400 per year in 2024 without losing benefits; earnings above that reduce your benefit by $1 for every $2 earned.
- In the year you reach full retirement age, the limit is $62,160 until the month you turn that age, then the limit disappears entirely.
- Only earned income counts toward the limit — not pensions, investment returns, rental income, or withdrawals from retirement accounts.
- Social Security recalculates your benefit at full retirement age to account for any months benefits were withheld, so you are not permanently losing money.
- These dollar amounts change each year, so check the Social Security website or call 1-800-772-1213 to confirm the current limits.
What counts as earnings and what does not
The earnings limit applies only to work income — wages from a job or net profit from self-employment. It does not count pensions, annuities, investment income, interest, dividends, capital gains, rental income, or money you withdraw from retirement accounts like IRAs or 401(k)s.
If you are self-employed, Social Security counts your net profit (income minus business expenses), not your gross revenue. You report this on your tax return, and Social Security uses that figure to determine whether you have exceeded the limit.
Bonuses, commissions, and vacation pay all count as earnings in the year you receive them, even if they are for work you did in a previous year. If you are unsure whether a specific type of income counts, call Social Security at 1-800-772-1213 before the end of the year so you can plan accordingly.
How the benefit reduction works
If you earn more than the annual limit, Social Security withholds benefits starting the month after you exceed the threshold. The reduction is $1 in benefits for every $2 you earn above the limit. This means if you earn $25,400 (which is $2,000 over the $23,400 limit), Social Security withholds $1,000 in benefits that year.
The withholding happens automatically — you do not have to do anything. Social Security adjusts your monthly payment or sends you a bill if the withholding exceeds what you have already received. You will receive a notice explaining the adjustment.
This reduction is temporary. When you reach full retirement age, Social Security recalculates your benefit to account for the months benefits were withheld. You receive a higher monthly payment going forward to make up for those lost months, so you eventually recover the money.
Planning your work and benefits in the year you reach full retirement age
The rules change in the year you turn full retirement age, and the timing matters. From January through the month before your birthday, the earnings limit is $62,160. Starting the month you reach full retirement age, there is no limit.
This means if you turn full retirement age in June, you can earn up to $62,160 from January through May without any reduction. Beginning in June, you can earn as much as you want. If you reach full retirement age in December, you have the higher limit ($62,160) for almost the entire year.
Plan your work schedule around this if you can. If you are close to the limit, ask your employer whether you can take unpaid leave or reduce hours in the months before your birthday, then return to full-time work afterward.
What to do if you think you will exceed the earnings limit
Report your expected earnings to Social Security before the end of the year. You can do this by calling 1-800-772-1213, visiting your local Social Security office, or using your my Social Security account online at ssa.gov. Reporting early helps Social Security adjust your payments correctly and prevents overpayments that you would have to repay later.
If you are self-employed, report your estimated net profit for the year. If you are an employee, report your expected wages. Social Security will tell you whether you will exceed the limit and by how much, so you can understand what to expect.
You can also adjust your work if you realize mid-year that you are on track to exceed the limit. Reducing your hours or taking unpaid time off in the remaining months can lower your annual earnings and reduce or eliminate the benefit reduction.
How earnings affect your benefit amount long-term
Earning income while you collect Social Security does not permanently reduce your benefit. When you reach full retirement age, Social Security recalculates your payment based on your complete work history. If you continued working and earning, those additional years of earnings may actually increase your benefit amount.
Social Security uses your highest 35 years of earnings to calculate your benefit. If you are still working, recent years of higher earnings can replace earlier years of lower earnings in this calculation. This means working longer can result in a higher monthly payment, even after accounting for any benefits withheld due to the earnings limit.
This is one reason some people choose to work past full retirement age — not only do they avoid the earnings limit, but they also build a larger lifetime benefit.
Frequently Asked Questions
Do I have to report my earnings to Social Security?
You should report expected earnings before the year ends so Social Security can adjust your payments correctly. If you do not report and earn more than the limit, you will owe back benefits, which Social Security will recover by reducing future payments or sending you a bill. Reporting early prevents this problem.
What if I earn more than the limit but only for part of the year?
The limit is annual, not monthly. If you earn $30,000 in six months and then stop working, you still exceeded the yearly limit and will have a benefit reduction. However, if you earn $15,000 in six months and then stop, you are under the limit and keep your full benefit.
Can I work part-time and still collect Social Security?
Yes. Part-time work counts toward the earnings limit just like full-time work. Whether you can work part-time without exceeding the limit depends on your hourly wage and hours per week. For example, working 20 hours per week at $22 per hour would put you near the annual limit.
Does the earnings limit explore if I am receiving benefits for my spouse or children?
No. The earnings limit applies only to the person who is collecting their own Social Security benefit based on their own work record. Family members receiving benefits on your record are not affected by your earnings.
What happens if I work for a company outside the United States?
Work income earned anywhere in the world counts toward the earnings limit, whether you are a U.S. citizen working abroad or a non-citizen working in the U.S. The location of the work does not matter — only whether it is earned income subject to Social Security tax.