Working and collecting Social Security
According to the Social Security Administration (SSA), if you're younger than full retirement age, 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.1 However, beginning with the first month you reach full retirement age, you may earn as much as you like without a reduction of your benefits. To determine when you would reach your full retirement age, use the SSA's online calculator.
Here's how it works:
If you plan on working in retirement and are under your full retirement age for the entire year, the SSA will deduct $1 from your benefit payments for every $2 that you earn above the annual limit. The limit for 2021 is set at $18,960. However, if you reach your full retirement age, the earning limit rises to $50,520 in 2021, and the SSA will deduct $1 in benefits for every $3 you earn above the set limit.
It's important to note that if you are self-employed, the SSA will consider your gross wages before withholding taxes and net earnings from your income. In addition, earnings from your annuities, pensions, and retirement plan income are typically not included, as well as interest earnings and profits from other investments that you may have.