Can you collect retirement money and still work? Your essential guide

According to a 2025 report from the National Poll on Healthy Aging, a growing number of adults over 65 are employed part-time or full-time. This trend raises a critical question for many seniors: Can you collect retirement money and still work? The answer is yes, but the implications depend heavily on your age and income level.

Quick Summary

Many retirees successfully combine work and retirement income. Navigating this path requires understanding how your earnings affect Social Security benefits, pension rules, and taxes. The impact changes significantly once you reach your full retirement age.

Key Points

• Earnings Limits: Your income can temporarily reduce Social Security benefits if you are under Full Retirement Age (FRA).

• Full Retirement Age: Once you reach your FRA, there are no earnings limits for Social Security, and your benefits are not reduced.

• Pension Rules: The impact of working on pension payments depends on your specific plan and whether you return to your former employer.

• Recalculation Benefit: Any Social Security benefits withheld due to earnings before FRA will be credited back to you with a higher monthly payment starting at your FRA.

• Tax Implications: High combined income from work and benefits can increase the amount of your Social Security benefits that are subject to federal income tax.

• Strategic Planning: Planning when to claim benefits and how much to earn can help you maximize your overall financial well-being.

• Healthy Aging: Working in retirement offers valuable non-financial benefits, including social engagement and mental stimulation.

Working and Collecting Social Security

For many, retirement money refers primarily to Social Security benefits. The rules regarding working while collecting these benefits are based on your age and earnings.

Working Before Full Retirement Age (FRA)

If you have not yet reached your full retirement age (between 66 and 67 depending on your birth year), your earnings can temporarily reduce your Social Security benefits. For 2025, if you earn over \$23,400, \$1 in benefits is deducted for every \$2 earned above the limit. In the year you reach FRA, the earnings limit is \$62,160 for the months before your birthday month, with a \$1 deduction for every \$3 over the limit. Any benefits withheld are not lost; they result in a higher monthly benefit once you reach FRA.

Working at or After Full Retirement Age

Once you reach your FRA, there is no earnings limit. You can earn any amount without your Social Security benefits being reduced.

Working and Collecting a Pension

Collecting a pension while working depends on your plan's specific terms. Generally, working for a different employer after retiring from the company that provided your pension will not affect your pension payments. However, returning to work for the same employer may cause pension payments to be suspended, especially if you return full-time. Consult your plan documents or HR department for details.

The Impact of Working on Taxes

Working and collecting retirement income can increase your total income, potentially making a portion of your Social Security benefits taxable. Taxability depends on your combined income (Adjusted Gross Income + non-taxable interest + half of Social Security benefits) and filing status. For 2025, single filers with combined income between \$25,000 and \$34,000 may have up to 50% of benefits taxed, and up to 85% taxed if over \$34,000. For married filing jointly, the thresholds are \$32,000 and \$44,000 respectively.

The Non-Financial Benefits of Working in Retirement

Beyond finances, working in retirement offers mental stimulation, social connection, a sense of purpose, and physical activity, contributing to healthy aging and overall well-being.

Maximizing Your Retirement Benefits While Working

To optimize your situation:

1. Delay Social Security: Waiting until FRA or age 70 can increase future monthly benefits.
2. Make Catch-Up Contributions: If 50 or older, contribute extra to 401(k)s and IRAs.
3. Review Your Pension Plan: Understand how working affects your specific pension.
4. Monitor Your Earnings: Track income if under FRA to understand the impact on Social Security.

Comparison of Working While Collecting Before vs. After FRA

Feature	Before FRA	At or After FRA
Annual Earnings Limit	Yes, \$23,400 (in 2025)	No limit
Benefit Reduction	\$1 for every \$2 over the limit	None
Benefit Recalculation	Yes, benefits are adjusted upward at FRA to credit for withheld months	Not applicable
Tax Impact	Work earnings and SS benefits may be taxed based on combined income	Work earnings and SS benefits may be taxed based on combined income

Conclusion

Working while receiving retirement income is feasible, but requires understanding specific rules, particularly for Social Security based on age relative to FRA. Pension rules depend on individual plans and employers. Navigating earnings limits and tax implications is key to a balanced financial plan.

For more official details on Social Security rules, visit the Social Security Administration's website: www.ssa.gov.

Frequently Asked Questions

Can I collect Social Security and work full-time?

Yes, you can collect Social Security and work full-time. However, if you are under your full retirement age, your earnings could temporarily reduce your benefits. Once you reach FRA, there is no limit on how much you can earn without penalty.

How much can I earn before my Social Security benefits are affected?

For 2025, if you are under FRA for the entire year, the limit is $23,400. In the year you reach FRA, the limit is $62,160 for the months before your birthday month. These limits change annually, so it's best to check the SSA website for the latest figures.

What kind of income counts toward the Social Security earnings limit?

The earnings limit applies only to wages from a job or net earnings from self-employment. Income from investments, pensions, annuities, and other government benefits does not count toward the limit.

Will the Social Security benefits that were reduced ever be returned to me?

Yes, any Social Security benefits temporarily withheld due to your earnings before FRA are not lost. The SSA will recalculate your monthly payment at your full retirement age to give you a higher benefit, accounting for the withheld amount.

Can I collect my pension and still work for my old employer?

It depends on the specific pension plan. Often, returning to full-time work for the same employer can cause your pension payments to be suspended. It is critical to review your plan's details or speak with a benefits coordinator before accepting a new position with a former company.

Does working affect the taxes I pay on my Social Security benefits?

Yes. If your combined income from all sources, including your work wages and a portion of your Social Security benefits, exceeds certain thresholds, a percentage of your Social Security benefits becomes subject to federal income tax.

Is it possible to pause my Social Security benefits after I start collecting?

Yes. If you have reached or passed your full retirement age but are not yet 70, you can voluntarily suspend your benefits. This allows you to earn delayed retirement credits, which will result in a larger monthly payment when you decide to resume collection.