Working During Social Security Retirement: Key Things You Need to Know

It's easy to associate collecting Social Security benefits with retirement, but you can actually work while receiving benefits. It doesn't come without some temporary drawbacks but it largely depends on when you applied for benefits.

If your birth date falls on or after January 2, 1960, your full retirement age is 67; however, you have the option to start receiving Social Security benefits earlier. as early as 62 . The "issue" with working while receiving benefits before your full retirement age is that a portion of your monthly payment from the Social Security Administration is withheld from you. The key word is "withheld" -- it's not actually taken from you.

Here, we’ll dissect what occurs when you earn income from working while also collecting your retirement benefits simultaneously, along with the modifications that will occur over time.

To learn more, be sure not to miss the Social Security payment schedule and What actions should you take if your Social Security payment doesn’t arrive? .

What occurs if you receive benefits while also being employed?

If you're working, collecting Social Security benefits and below your full retirement age, your benefit payment will be reduced. The SSA will withhold $1 from every $2 you earn above the annual limit. For 2025, it's $23,400.

The SSA's guide on How employment impacts your benefits provides a graph to help you understand the potential amount you might receive, depending on your benefit sum and income.

If you will reach full retirement age in 2025, $1 for every $3 earned above $62,160 will be withheld. The SSA will only count earnings up to the month before you reach your full retirement age and not earnings for the entire year. That's because beginning the month you reach your full retirement age, your earnings will no longer reduce your benefit amount, no matter how much you're bringing in.

Working while receiving Social Security increases your benefit later on

If you held employment and collected benefits prior to reaching your full retirement age, the Social Security Administration (SSA) will adjust your benefit amount starting from the month you turn that specific age. This adjustment provides compensation for the periods during which your benefits were reduced. Consequently, you have the opportunity to increase your benefit sum upon turning 67 by continuing to work before attaining full retirement age.

That's not the only way to raise your monthly benefit amount.

When you initially apply for Social Security retirement benefits, the SSA will take the 35 years you earned the most money throughout your working life and determine your monthly benefit amount based on those years.

Now, say you continue to work and receive benefits, and you earn more money in 2025 than in any one of the previously calculated highest earned 35 years – one of those would be removed and replaced with your 2025 earnings, and it would be factored in, resulting in a larger monthly benefit amount. If your earnings change while you're receiving benefits, you are responsible for contacting the SSA and reporting any increase (or decrease) in annual earnings you expect to receive.

And finally, the beneficiaries can also consistently anticipate the benefits from it. Social Security cost-of-living adjustment (COLA) raise to increase their benefit amount, even if it is a small one, similar to this year .

What steps should I follow to apply for my retirement benefits?

If you believe you're prepared to file for retirement benefits, you ought to begin by setting up an application. My Social Security account And locate the "apply for benefits" page. You can also refer to our guide on How to file for Social Security retirement benefits , too.

To learn more about Social Security and retirement, be sure not to miss out on this additional information. things you should know decades before you retire .