Working While Collecting Social Security
Many Americans choose to continue working while collecting Social Security; whether to stay active, boost income, or ease into retirement. Although those who are not yet at full retirement age, need to understand how working can affect their benefits. The Social Security Administration (SSA) may withhold a portion of their payments if their earnings exceed certain limits.
Can You Work and Collect Social Security
Yes, In fact; you can collect Social Security benefits while working. However, depending on your age and income, benefits may be temporarily reduced.
What Is Full Retirement Age (FRA)
The full retirement age depends on the year an individual was born. For most people retiring today, the FRA ranges from 66 to 67. Earnings limits apply to those who collect Social Security before reaching FRA and continue to work.
| Year of Birth | Full Retirement Age |
|---|---|
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
2025 Social Security Income Limits & Penalties
In 2025, if an individual is under the full retirement age for the entire year, the SSA deducts $1 from their benefits for every $2 they earn over $22,320/year (approx. $1,860/month).
Example:
Individuals who earn $30,000 while receiving Social Security before FRA are $7,680 over the limit. This means; SSA would withhold $3,840 of their benefits.
For those who reach full retirement age in 2025, the limit is higher:
You can earn up to $59,520 in the months before your birthday, with only $1 withheld for every $3 earned over the limit.
Once you reach full retirement age, there are no penalties; you can work and earn as much as you want without a reduction in benefits.
Learn about Medicare penalties
What Happens to Withheld Benefits
The good news: the money isn’t gone forever. When you reach full retirement age, the SSA will recalculate your benefit amount and increase it to account for the months when benefits were withheld due to excess earnings.
Are There Tax Implications
The answer is; yes, Social Security benefits may be taxable depending on total income (including wages, investments, and other retirement income).
If combined income (defined as adjusted gross income + nontaxable interest + half of your Social Security benefits) is:
- Between $25,000–$34,000 (individual) or $32,000–$44,000 (married), up to 50% of benefits may be taxed.
- Above $34,000 (individual) or $44,000 (married), up to 85% of benefits may be taxable.
Impact on Medicare premiums
- If you receive Social Security benefits, your Medicare Part B premiums can be automatically deducted from your monthly payment.
- The standard Part B premium for 2025 is $185, but it can be higher based on your income from two years prior.
Watch a video on OEP, SEPs an Late Part B Enrollment
Other considerations
- You will continue to pay Social Security and Medicare taxes on your earnings while working, regardless of age.
- Working might increase your future Social Security benefits, especially if your current earnings are higher than those in some previous years used to calculate your benefit.
- Some states also tax Social Security benefits.
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When Working Makes Sense
Even with temporary benefit reductions or taxes, working while collecting Social Security may be worth it. Additional income can help:
- Cover rising expenses
- Delay tapping into savings
- Boost your Social Security by increasing your lifetime earnings record
Key Takeaways
- You can work and collect Social Security
- Earnings limits apply before full retirement age
- Benefits may be withheld, but are recalculated later
- Your benefits may be taxable depending on total income
Before deciding to work while on Social Security, consider speaking with a financial advisor or using the Social Security Earnings Test Calculator at SSA.gov. It’s a smart move to understand how your job may affect your benefits so you can make the most of your income now and in the future.