Yes, you can collect Social Security benefits while working, but there are important rules and income limits that can affect how much you receive, especially if you claim benefits before reaching full retirement age. Understanding how your earnings interact with your Social Security benefits is crucial for maximizing your income during retirement.
Full Retirement Age and Its Impact
The Social Security Administration (SSA) sets a “full retirement age” (FRA), which depends on the year you were born. For example, if you were born in 1960 or later, your FRA is 67. You can begin claiming Social Security benefits as early as age 62, but doing so will result in reduced monthly payments. On the other hand, waiting until FRA or later can increase your benefits.
If you’ve reached your full retirement age, you can work and earn as much as you want without affecting your Social Security benefits. However, if you start collecting benefits before reaching your FRA and continue working, some of your benefits may be temporarily withheld.
Earnings Limit and Benefit Reduction
For those under full retirement age, the SSA imposes an earnings limit. In 2025, the annual limit is $22,320. If you earn more than this while receiving Social Security, your benefits will be reduced by $1 for every $2 you earn over the limit.
In the year you reach full retirement age, a higher limit applies. For 2025, that limit is $59,520. If you earn more than this during the months before you reach FRA, your benefits are reduced by $1 for every $3 earned over the threshold. Once you hit your FRA, the earnings limit no longer applies, and your benefits will not be reduced, regardless of how much you earn.
Temporary Reduction, Not Permanent Loss
It’s important to note that any benefits withheld due to the earnings limit are not lost forever. Once you reach full retirement age, your monthly benefit will be recalculated to account for the months when benefits were withheld. This means you may receive a higher monthly benefit going forward.
Self-Employment Considerations
For those who are self-employed, the SSA looks at net earnings rather than gross income. In addition, how many hours you work can be a factor in determining whether you are considered “retired” under Social Security’s rules, particularly if you’re below FRA.
Tax Implications
Working while receiving Social Security can also affect your taxes. If your combined income (adjusted gross income + nontaxable interest + half of your Social Security benefits) exceeds certain thresholds, a portion of your benefits may be subject to federal income tax.
Bottom Line
Yes, you can collect Social Security while working, and doing so may be a smart strategy to supplement your income. However, if you’re under full retirement age, be aware of the annual earnings limits to avoid benefit reductions. After reaching FRA, you can work without penalty, and you may even increase your total lifetime benefits. Understanding the rules ensures you make informed decisions about retirement and work.
