The Social Security Earnings Test at Age 64
For those who claim Social Security benefits before reaching their full retirement age (FRA), the Social Security Administration (SSA) applies an earnings test. Age 64 falls squarely into this category, meaning your wages and self-employment income can impact your benefits. For each year that you are under your FRA, the SSA will temporarily withhold part of your benefit if you earn over a specific limit. It’s a key piece of information to consider when deciding to claim early while still working.
How the Earnings Limit Works
The earnings limit is the amount you can earn in a year without affecting your Social Security benefits. If you exceed this limit, a portion of your benefits will be withheld. For example, the annual earnings limit for someone under their FRA for the entire year was $23,400 in 2025. The penalty for exceeding this limit is $1 withheld for every $2 you earn above it.
For example, if you earn $30,000 in 2025 and are under FRA all year:
- Earnings above limit: $30,000 - $23,400 = $6,600
- Benefit reduction: $6,600 / 2 = $3,300
This means $3,300 would be withheld from your total annual benefits for that year. This could result in fewer monthly checks or smaller check amounts, depending on your benefit and how much you exceed the limit.
A Special Rule for Your First Year of Retirement
In the first year you start receiving benefits, a special monthly earnings test applies. This can be particularly helpful if you retire mid-year. For example, if you were to retire at age 64 in August, the special rule allows you to receive full benefits for the months you are considered retired, regardless of how much you earned earlier in the year. The monthly limit for this special rule was $1,950 in 2025. After the first year, only the annual earnings limit applies.
Recalculating Your Benefits at Full Retirement Age
Any benefits withheld due to the earnings test are not lost forever. When you reach your full retirement age, the SSA recalculates your benefit amount to credit you for the months benefits were withheld. This results in a permanent increase to your monthly benefit going forward. The SSA automatically adjusts your payment once you reach your FRA, without any action required on your part. This ensures that the money is not lost but simply deferred and returned to you over your later retirement years.
Comparison: Working While Claiming Early vs. Delaying Benefits
Choosing when to start your benefits involves weighing the trade-offs between receiving income now and securing a higher monthly amount later. This comparison can help clarify the decision:
| Feature | Working at 64 and Claiming Early | Delaying Benefits Until Full Retirement Age | Delaying Benefits Past Full Retirement Age |
|---|---|---|---|
| Earnings Impact | Yes, subject to the earnings test. Benefits may be temporarily withheld if you exceed the limit. | None. You can earn any amount with no benefit reduction. | None. You can earn any amount with no benefit reduction. |
| Monthly Benefit | Permanently reduced due to early claim, but is increased at FRA to account for benefits withheld. | Your benefit is based on your full retirement amount, with no permanent reduction for early claiming. | Your benefit is higher due to Delayed Retirement Credits. |
| Delayed Retirement Credits | Not applicable; you do not earn credits while collecting early. | Not applicable; you are claiming at your FRA. | Earned for each month you delay, increasing your monthly benefit. |
| Annual Earnings Limit | Applies every year until you reach FRA. | Does not apply. | Does not apply. |
| Cash Flow | Receive income from both work and Social Security (potentially reduced). | Continue to rely solely on work income until you claim. | Continue to rely on work income; can claim for even higher benefits later. |
Other Factors to Consider
Beyond the earnings test, other considerations are vital for a holistic financial plan. Your additional earnings at age 64 may increase your total lifetime benefit if they are among your 35 highest earning years. The SSA automatically reviews your earnings record annually and recalculates your benefit if a new year of earnings is high enough to replace a prior year with lower or no earnings. It is also important to consider the tax implications. A portion of your Social Security benefits may be subject to federal income tax if you have other substantial income, such as wages.
For personalized advice, it is always recommended to consult with a financial advisor or the Social Security Administration directly. The SSA offers a wealth of information and online tools to help you plan your retirement. You can find detailed resources on their website regarding how work affects your benefits at www.ssa.gov/pubs/EN-05-10069.pdf.
Conclusion: Making an Informed Choice
Working at 64 while receiving Social Security benefits is a viable option for many, but it comes with specific rules and trade-offs. The key is to understand the annual earnings limit and its impact on your benefits before your full retirement age. The temporary withholding of benefits is not permanent and will lead to an increased monthly payment later, providing a long-term adjustment that credits you for your withheld payments. By carefully planning and considering all the factors, you can make the right decision for your financial future and overall healthy aging plan.
