Working while receiving Social Security retirement or survivors benefits is possible and may even increase your future benefits. This article breaks down how your earnings can affect your Social Security payments and what to expect at full retirement age, focusing on “How Much Can You Make And Collect Social Security”.
Each year, the Social Security Administration (SSA) reviews the records of beneficiaries with reported wages from the previous year. If your latest year’s earnings rank among your highest, the SSA recalculates your benefit, potentially increasing your payments retroactively to January of the following year. For those receiving survivors benefits, increased earnings could lead to a higher retirement benefit than the current survivors benefit.
Earning Limits and Social Security Benefits
When you start receiving Social Security retirement benefits, you are considered retired by the SSA. You can work and receive benefits, but your earnings may affect the amount you receive.
If you’re younger than the full retirement age, exceeding the yearly earnings limit may reduce your benefit amount. In 2025, if you are under full retirement age for the entire year, the SSA deducts $1 from your benefit payments for every $2 you earn above the annual limit of $23,400.
For those reaching full retirement age in 2025, the deduction is $1 for every $3 earned above $62,160. However, the SSA only counts earnings up to the month before you reach full retirement age.
A special rule applies if your earnings exceed the limit for the year, but you are considered retired for some months. The SSA can pay a full Social Security benefit for any whole month they consider you retired, regardless of your yearly earnings.
If you receive survivors benefits, the SSA uses your full retirement age for retirement benefits when applying the annual earnings test (AET), even if the full retirement age for survivors benefits is earlier. This rule applies even if you aren’t entitled to retirement benefits.
More information can be found in the SSA publication, “How Work Affects Your Benefits.”
Note: Different rules apply to those under full retirement age working outside the United States, detailed in the publication, “Your Payments While You Are Outside the United States.”
What Happens When You Reach Full Retirement Age?
Upon reaching full retirement age:
- Your earnings no longer reduce your benefits, regardless of how much you earn.
- The SSA recalculates your benefit amount to credit you for months when benefits were reduced due to excess earnings.
Examples of How Earnings Affect Benefits
Here are a few examples to illustrate how earnings affect Social Security benefits in 2025:
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Under Full Retirement Age All Year: Suppose you’re entitled to $800 per month ($9,600 annually) and earn $32,320, which is $8,920 above the $23,400 limit. The SSA will reduce your benefits by $4,460 ($1 for every $2 above the limit). You’ll receive $5,140 of your $9,600 in benefits for the year ($9,600 – $4,460 = $5,140).
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Reaching Full Retirement Age in August 2025: You’re entitled to $800 per month ($9,600 annually) and earn $69,000 during the year, with $63,000 earned from January through July ($840 above the $62,160 limit). Your Social Security benefits will be reduced through July by $280 ($1 for every $3 above the limit). You’ll receive $5,320 out of your $5,600 benefits for the first 7 months ($5,600 – $280 = $5,320). Starting in August 2025, you’ll receive your full benefit ($800 per month), no matter how much you earn.
When calculating deductions from your benefits, the SSA only counts wages from your job or net profit from self-employment, including bonuses, commissions, and vacation pay. They do not count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.
You can use the SSA’s earnings test calculator to estimate how your earnings could affect your benefit payments if you are eligible for retirement benefits this year and still working.
Key Takeaways on Social Security and Earnings
Understanding how your earnings impact your Social Security benefits is crucial for financial planning during retirement. While working while receiving benefits is possible, being aware of the earnings limits and how they affect your payments can help you make informed decisions. Remember, these rules change once you reach full retirement age, offering more flexibility in earning potential without reducing your benefits.
