Working while receiving Social Security

Can you collect Social Security and still work?

There is a lot to understand about Social Security as you prepare for retirement. If you’re wondering if you can collect Social Security while still working, the answer is yes, but earnings may reduce your benefits if you have not yet reached full retirement age (FRA) and your income exceeds certain defined thresholds.

According to the Social Security Administration (SSA), if you’re younger than FRA and receiving SSA retirement benefits, working for an employer, and are earning additional income that exceeds the yearly earnings limit (as set by the SSA), your benefits may be reduced.

If you plan on working in retirement and are under your FRA for the entire year, the SSA will deduct $1 from your benefit payments for every $2 that you earn above the annual set limit. In the year you reach your full retirement age, the earning limit increases, and the Social Security Administration (SSA) will deduct $1 in benefits for every $3 you earn above the set limit. If you’re self-employed, the SSA will consider your gross wages before withholding taxes and net earnings from your income.

How much money can I earn while on Social Security?

According to the Social Security Administration, the 2025 earnings limits are $23,400 under FRA, $62,160 in the FRA year. The reduction formulas explained above apply ($1 for every $2 or $3 over) these thresholds.¹

As an example, let’s say Tom begins taking Social Security benefits at age 63, but his full retirement age is 67. Tom’s monthly Social Security payments are $2,250. At age 63, he receives 80% of that amount, or $1800 per month.

At age 63, Tom decides to take a full-time job as an auto parts delivery driver to stay busy and meet people. At that job, he earns $30,000/year. He reports the job to the SSA and his Social Security benefits are recalculated and he now receives a check for $1525 each month.

His salary ($30,000) less the SSA income limit ($23,400) = $6,600
$1 deducted for every $2 earned over the limit/ $2 = $3,330 (annual amount of reduced benefit) divided by 12 months = $275 (reduction on monthly SSA payment)

Assuming he keeps that job at the same salary until age 67, when he reaches FRA of 67, when he will then begin to receive his full retirement payment of $2,250/month.

Social Security maximum taxable earnings: What it means in retirement

It’s important to understand the implications of retirement income tax when planning for Social Security benefits. In 2025, the maximum amount you pay Social Security taxes on is $176,1000 annually. Any income earned over that amount is neither subject to Social Security taxes, nor is it factored into your Social Security payments.

Up to 85% of your Social Security payments are taxable if you file as an individual and your "combined income" exceeds $25,000. If you file a joint return, the limit is $32,000.²

Income in retirement: What counts toward Social Security limits?

All income that comes from an employer counts toward the SSA income limits. This includes things like salary, bonus, vacation time and commissions. Income from dividends, pensions, interest income, income earned from rental properties and annuities does not count as income when calculating SSA income limits for Social Security benefits.

It's also important to note that only income earned during the period in which Social Security benefits is counted. So, for example, if you receive income from January to April and then you begin taking Social Security benefits in May, then only the income earned beginning in May and for the rest of the year will be counted toward those income limits.

Full retirement age and benefit rules

While Social Security benefits may be taken as early as 62 years old, FRA is 67 years old. Once you have reached full retirement age, you can earn any amount of income and still receive your full SSA benefit.

Can returning to work increase my future Social Security benefit?

The answer is yes! Because your Social Security benefit is based on your highest earning 35 years, those extra dollars you’re earning may actually give you a raise in your benefits. For example, if any of the years while working part-time in retirement are higher than any of the other 35 years, the SSA will replace the lowest earning years. But wait, it gets even better.

The nice thing about working after retirement is that the SSA does all the calculating for you. Each year, the SSA reviews your record for working while receiving your benefits to see if additional earnings will increase your monthly benefit. If an increase is in order, the SSA will recalculate your new benefit amount and pay the increase retroactive to January, following the year of your additional earnings.

Sources:

1 Social Security Administration, “Receiving Benefits While Working,” 2025.
2 Social Security Administration, “Must I pay taxes on Social Security benefits?” June 30, 2025.

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