Your Guide to Working and Earning While Receiving Social Security
For many older Americans, retirement doesn't mean a complete stop to working. Whether for financial necessity or personal fulfillment, continuing to earn an income is a common goal. A primary concern is how this work impacts Social Security benefits. The good news is that once you reach your full retirement age, the earnings restrictions disappear entirely [1.3.1, 1.3.7].
What is Full Retirement Age (FRA)?
Full Retirement Age (FRA) is the age at which you are entitled to receive 100% of your Social Security benefits, without any reduction for claiming early. This age isn't the same for everyone; it gradually increases depending on your birth year [1.4.6].
- Born 1943-1954: Your FRA is 66.
- Born 1955-1959: Your FRA increases by two months for each year after 1954. For example, for someone born in 1959, the FRA is 66 and 10 months [1.4.8].
- Born 1960 or later: Your FRA is 67 [1.4.7].
Starting in the month you reach your FRA, there is no limit to how much you can earn while still receiving your full Social Security payments [1.6.1].
The Rules Before and After Full Retirement Age: A Clear Distinction
The rules surrounding earned income are fundamentally different depending on whether you have reached your FRA. This distinction is the source of most confusion.
Working Before Full Retirement Age
If you claim Social Security benefits early (as early as age 62) and continue to work, you are subject to an annual earnings test. If your income exceeds a certain limit, the Social Security Administration (SSA) will temporarily withhold some of your benefits [1.3.2].
- For those under FRA for the entire year: In 2025, the earnings limit is $23,400 [1.2.2, 1.2.3]. For every $2 you earn above this limit, the SSA deducts $1 from your benefits [1.2.4].
- For the year you reach FRA: A higher earnings limit applies to the months before your FRA birthday. In 2025, this limit is $62,160 [1.2.2, 1.2.8]. For every $3 you earn above this limit during that period, the SSA deducts $1 from your benefits [1.2.4].
It's important to note that this withheld money is not permanently lost. Once you reach FRA, the SSA recalculates your benefit amount to give you credit for the months your benefits were withheld, resulting in a higher monthly payment going forward [1.3.1, 1.6.3].
Comparison: Working Before vs. After Full Retirement Age
| Factor | Working Before Full Retirement Age | Working After Full Retirement Age |
|---|---|---|
| Annual Earnings Limit | Yes, $23,400 in 2025 (or $62,160 in the year you reach FRA) [1.2.4] | No limit [1.3.2] |
| Benefit Withholding | $1 for every $2 (or $3) earned over the limit [1.2.4] | None [1.3.2] |
| Benefit Recalculation | Yes, benefits are recalculated at FRA to credit for withheld amounts [1.3.1] | Not applicable, as no benefits are withheld. However, continued earnings can still increase your benefit amount [1.3.2]. |
| Types of Income That Count | Wages from a job, net earnings from self-employment [1.3.4] | N/A (no limit) |
Can Working After Full Retirement Age Increase Your Benefits?
Yes, it can. The SSA calculates your retirement benefit based on your 35 highest-earning years [1.3.4]. Each year you continue to work and pay Social Security taxes, your earnings are reported. If your recent earnings are higher than one of the years in your top 35, the SSA will automatically recalculate your benefit amount, and you could receive an increase [1.3.2, 1.3.4]. This means that not only are your benefits not penalized, but your work could actually lead to a larger monthly check.
What Income Counts Toward the Earnings Limit?
For those working before FRA, it's crucial to understand what the SSA considers 'earned income.' This generally includes:
- Wages from an employer
- Net earnings from self-employment
- Bonuses, commissions, and vacation pay [1.3.4]
Income that does not count towards the earnings limit includes:
- Pensions and annuities
- Investment income (interest, dividends)
- Government or military retirement benefits
- Inheritances [1.3.4]
Tax Considerations
While your benefits won't be reduced due to earnings after FRA, your total income can affect whether your Social Security benefits are taxable. Your 'combined income' (Adjusted Gross Income + nontaxable interest + one-half of your Social Security benefits) is the key figure [1.3.4]. Depending on this total, up to 85% of your Social Security benefits could become subject to federal income tax [1.3.4]. It's wise to consult with a tax professional to understand the implications for your specific situation.
Conclusion: Work With Confidence After FRA
So, can I earn income without Social Security being penalized being of full retirement age? Absolutely. Once you cross that important age threshold, the earnings test no longer applies to you. You are free to work as much or as little as you want without the fear of your Social Security checks being reduced. In fact, your continued work could even give your monthly benefit a boost. For more detailed information, the Social Security Administration provides helpful resources like the publication "How Work Affects Your Benefits" [1.6.2].
