The earnings limit depends on whether you have reached your full retirement age
Social Security does not stop your benefits entirely if you work and earn money. Instead, the program reduces your monthly payment by a set amount if you earn above a threshold — but only if you have not yet reached 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 threshold and the reduction rate change each year. For 2024, if you are under full retirement age for the entire year, Social Security reduces your benefit by $1 for every $2 you earn above $23,400. The year you reach full retirement age, the limit is higher for months before you turn that age, and then it disappears entirely once you reach it.
The key distinction is the calendar year you reach full retirement age. If that happens in 2024, a different rule applies only to earnings before the month you turn that age. After that month, no earnings limit exists for the rest of your life.
Key Takeaways
- If you are under full retirement age, Social Security reduces your benefit by $1 for every $2 you earn above the annual threshold, which was $23,400 in 2024.
- Once you reach your full retirement age, you can earn any amount without any reduction to your benefits.
- The earnings limit applies only to wages and self-employment income, not to pensions, investments, or rental income.
- Social Security counts only earnings in the calendar year — if you earn $50,000 in one month and nothing the rest of the year, the limit still applies to that year's total.
- You must report your earnings to Social Security, usually through your online account or by phone, so the agency can adjust your payment correctly.
What counts as earnings under Social Security rules
Social Security counts wages from a job and net income from self-employment. If you work for an employer, the earnings that count are your gross wages before taxes — the amount shown on your W-2 form. If you are self-employed, it is your net profit after business expenses, not your total revenue.
Several types of income do not count toward the earnings limit. Pensions from a former employer, investment income, interest, dividends, rental income, and capital gains are all ignored. Bonuses, commissions, and vacation pay count as earnings in the year you receive them, even if they are for work done in a previous year. Sick pay and severance also count.
If you receive a lump-sum payment for unused vacation or sick leave after you retire, that counts as earnings in the year you receive it, which can trigger the earnings limit that year even if you do not work again.
How the reduction works if you earn above the threshold
The reduction is straightforward arithmetic. If the threshold is $23,400 and you earn $25,400, you are $2,000 over the limit. Social Security subtracts $1 from your benefit for every $2 over, so you lose $1,000 in benefits that year. If your monthly benefit is $1,500, you would receive $500 less across the year — roughly $42 per month on average, though Social Security usually withholds it from a few months rather than spreading it evenly.
The reduction applies to your own earnings only. If you are married and both receive Social Security, your spouse's earnings do not affect your benefit, and your earnings do not affect theirs. Each person's benefit is reduced only by their own earnings above the threshold.
The reduction is not permanent. It applies only in the year you earn above the threshold. Once you reach full retirement age, the earnings limit disappears and your benefit returns to its full amount, even if you earned far more than the limit in previous years.
When you reach full retirement age and the limit ends
Your full retirement age depends on your birth year. If you were born between 1943 and 1954, your full retirement age is 66. If you were born between 1955 and 1960, it ranges from 66 and 2 months to 66 and 10 months. If you were born in 1960 or later, your full retirement age is 67. Social Security's website has a table showing the exact age for your birth year.
The month you reach full retirement age is when the earnings limit stops explore. If you reach it in June, the limit applies to your earnings from January through May of that year, but not to earnings from June onward. You can earn unlimited amounts from that month forward without any reduction to your benefits.
If you claimed Social Security before reaching full retirement age, your benefit amount was permanently reduced — that reduction does not go away when you reach full retirement age. But the earnings limit does go away, so you stop losing money to the earnings test once you reach that age.
How to report your earnings to Social Security
You are responsible for telling Social Security about your earnings. The agency does not automatically know how much you earned unless your employer reports it on a W-2, and even then there is often a delay. If you do not report and Social Security later discovers you earned above the threshold, you will owe back the benefits you should not have received.
The easiest way to report is through your online account at ssa.gov. You can log in, go to your message center, and report your earnings there. You can also call Social Security at 1-800-772-1213 and report by phone, or visit your local Social Security office in person. Keep records of your earnings — pay stubs, tax returns, or business records — in case Social Security asks for proof.
Report your earnings as soon as you know what they will be for the year. If you are self-employed and do not know your final net income until you file taxes, you can report an estimate and correct it later. Social Security will adjust your benefits if the actual amount differs from what you reported.
Earnings limits for the year you reach full retirement age
The year you reach full retirement age, Social Security uses a higher earnings threshold, but only for the months before you turn that age. In 2024, this threshold is $62,160, and the reduction is $1 for every $3 you earn above it — a gentler penalty than the regular limit.
Once you reach full retirement age in that month, the limit disappears entirely for the rest of the year. If you reach full retirement age in June, you can earn unlimited amounts from June through December without any reduction.
This higher threshold applies only to earnings before the month you reach full retirement age. It is a one-time benefit in the year you turn that age. After that year, the earnings limit never applies again, no matter how much you earn.
What happens if you earned above the limit in a previous year
If Social Security overpaid you because you earned above the threshold and did not report it, the agency will ask you to repay the overpayment. You can repay in a lump sum or request that Social Security withhold a portion of your monthly benefit until the debt is paid. If you disagree with the amount, you can request a reconsideration or appeal.
If you intentionally hid earnings or provided false information, Social Security may investigate and could refer the case to law enforcement for fraud. Honest mistakes — failing to report earnings you forgot about or misunderstanding what counts — are handled as overpayments, not fraud.
The best approach is to report earnings promptly and keep records. If you are unsure whether something counts as earnings, call Social Security and ask before you claim it does not.
Frequently Asked Questions
Can I work part-time and still receive Social Security?
Yes. If you are under full retirement age and earn below the threshold, you receive your full benefit. If you earn above it, your benefit is reduced but you still receive something. Many people work part-time while collecting Social Security, especially in the years before they reach full retirement age.
Does my spouse's income count toward my earnings limit?
No. Your spouse's earnings do not affect your benefit, and your earnings do not affect theirs. Each person's benefit is reduced only by their own earnings above the threshold. This applies whether you are married or divorced (if you were married at least 10 years).
What if I am self-employed — do I report gross income or net profit?
You report net profit, which is your gross revenue minus business expenses. If you earned $50,000 in revenue but spent $20,000 on supplies and overhead, your net income is $30,000 and that is what counts toward the earnings limit. Keep records of your expenses to support this calculation.
If I work one month and earn $10,000, does the earnings limit explore?
Yes. Social Security counts all earnings in the calendar year, regardless of how many months you worked. If you earn $10,000 in one month and nothing the rest of the year, that $10,000 counts toward the annual threshold. The timing does not matter — only the total for the year.
What if I claimed Social Security early — does the earnings limit still explore?
Yes, the earnings limit applies to anyone under full retirement age, whether they claimed at 62 or any age before full retirement age. Once you reach full retirement age, the limit disappears. If you claimed early, your benefit amount is permanently lower, but you stop losing money to the earnings test once you reach full retirement age.