Understanding Full Retirement Age (FRA)
For many individuals born in 1960 or later, the Full Retirement Age (FRA) is 67. Reaching this age allows you to receive your full, unreduced Social Security benefits. While claiming earlier is possible from age 62, it permanently reduces your monthly payment. Understanding your FRA is essential for those who wish to work full-time in retirement without impacting their benefits.
Working While Collecting Benefits
If you have reached your full retirement age, there is no limit on your earnings from work while receiving full Social Security benefits. Any higher earnings in these years could potentially increase your future monthly benefit amount through a recalculation.
However, if you are under your FRA and collect benefits, an annual earnings limit applies, which can temporarily reduce your benefits. For 2025, the limit is $23,400 if you are under FRA for the entire year, with $1 deducted for every $2 earned above the limit. In the year you reach FRA, a higher limit of $62,160 applies to earnings before your birthday, with $1 deducted for every $3 earned over this amount. These reductions cease once you reach your FRA, and your benefit will be recalculated to credit you for withheld payments.
Comparison of Working Before vs. After Full Retirement Age
| Feature | Working Before Full Retirement Age | Working At or After Full Retirement Age |
|---|---|---|
| Earnings Limit | Yes, an annual limit applies. | No earnings limit. |
| Benefit Reduction | Benefits reduced if earnings exceed limit. | Benefits not reduced by earnings. |
| Benefit Recalculation | Withheld benefits credited back as higher payment at FRA. | Higher earnings may increase benefit amount. |
The Financial Implications of Continuing to Work
Working full-time after retirement allows for continued saving and potential growth of retirement accounts. Higher current earnings can replace lower-earning years, potentially increasing your Social Security benefit. Be aware that working may increase your taxable income, potentially making a portion of your Social Security benefits taxable. Also, check if your pension has specific rules about returning to work. Consulting a financial advisor is recommended.
Delaying Benefits Past Your Full Retirement Age
Delaying Social Security benefits past your FRA, up to age 70, earns delayed retirement credits. This results in a permanently higher monthly benefit, increasing by up to 8% per year you wait.
For more detailed information on your specific benefits and earnings limits, refer to the official Social Security Administration website.
Conclusion: Making the Right Choice for You
Retiring and working full-time is achievable, but understanding your age relative to your FRA and the Social Security rules is key. Waiting until your FRA to claim benefits is the simplest way to avoid benefit reductions while working. Continuing to work after retirement can boost savings, potentially increase Social Security payments, and offer non-financial benefits of engagement. By understanding these factors, you can make an informed decision aligned with your retirement goals.
