The Simple Answer: Why Age Doesn't Matter
For anyone working in a covered position or who is self-employed, the obligation to pay Social Security and Medicare taxes, known as FICA (or SECA for the self-employed), continues as long as you have earned income. There is no age-based exemption from paying these taxes. Whether you are 25, 55, or 85, your earnings from work are subject to these payroll taxes.
This is a common area of confusion for many seniors. The misconception often stems from two separate rules that affect retirees:
- The Retirement Earnings Test: Before you reach Full Retirement Age (FRA), there's a limit on how much you can earn before your Social Security benefits are temporarily reduced. Once you reach your FRA, this earnings limit disappears completely, allowing you to earn any amount without it affecting your benefit amount. Many people mistakenly believe this also eliminates the need to pay Social Security tax.
- Income Tax on Benefits: A portion of your Social Security benefits may be subject to federal income tax, depending on your combined income level. This is an income tax, not the Social Security payroll tax, and it's calculated using a different formula based on total income, not age.
Distinguishing Tax on Earnings from Tax on Benefits
It is crucial to understand the difference between these two types of taxation. When you are working, FICA taxes are deducted from your paycheck to fund the Social Security and Medicare programs. This is a continuous obligation. The taxes on your Social Security benefits, on the other hand, relate to your overall financial picture and are part of your federal income tax filing.
Tax on your earned income
- Purpose: Funds the Social Security and Medicare trust funds.
- Who pays: All employees and self-employed individuals with qualifying income.
- How long: As long as you are working and earning income.
- Rate: In 2025, employees pay 6.2% for Social Security and 1.45% for Medicare. Employers match this amount. Self-employed individuals pay both halves.
Income tax on your benefits
- Purpose: Federal government revenue.
- Who pays: Individuals whose combined income (adjusted gross income + nontaxable interest + 1/2 of your Social Security benefits) exceeds a certain threshold.
- How long: Only if you meet the income requirements, regardless of age.
- How much: Up to 85% of your Social Security benefits can be subject to federal income tax, depending on your income level.
Working After Full Retirement Age: The Benefits
Continuing to work and pay Social Security taxes after age 70 is not without its advantages. The Social Security Administration automatically recalculates your benefit amount each year. If your earnings from the current year are one of your top 35 earning years (the number of years used for the benefit calculation), your new, higher earnings will replace a lower-earning year in your record. This can result in a slightly higher monthly benefit payment, which is a welcome increase for many retirees.
Furthermore, for those who reached their Full Retirement Age (FRA) and continue to work, the earnings test that once reduced benefits no longer applies. This means you can keep all of your Social Security retirement or survivor benefits, no matter how much you earn.
How continued work can increase your benefit
- Your benefit is based on your 35 highest-earning years.
- If you work past 70 and your current income is higher than one of your lower-earning years on record, the SSA automatically substitutes the new, higher income.
- This recalculation can result in a permanent boost to your monthly benefits.
Employee vs. Self-Employed Social Security Tax
Navigating the tax system as a working senior requires understanding whether you are an employee or self-employed. The tax responsibilities differ, particularly concerning who is responsible for paying the full tax amount.
| Feature | Employee | Self-Employed |
|---|---|---|
| Tax Type | FICA tax (Social Security and Medicare) | SECA tax (Self-Employment Contributions Act) |
| Social Security Tax Rate | 6.2% on wages | 12.4% (both employee and employer portions) |
| Medicare Tax Rate | 1.45% on wages | 2.9% (both employee and employer portions) |
| Annual Wage Base Limit | Applies up to a certain income cap (e.g., $176,100 for 2025) | Applies up to the same income cap for the Social Security portion |
| Who Pays | Shared by employee and employer | Individual is responsible for both halves |
The Bottom Line
The rules for paying Social Security tax are clear and universally applied to all working individuals with covered earnings, regardless of their age. The notion that you stop paying after age 70 is a persistent myth, likely conflated with rules about the retirement earnings test or the taxation of Social Security benefits themselves. If you are still working and receiving a paycheck or earning income from self-employment, you must continue to pay into the system.
While continuing to pay Social Security taxes in your later years may feel like an added burden, it is essential for the program's sustainability and can even help increase your future benefits. For detailed information and official tools to calculate your potential benefits, you can explore the SSA's Guide to Working While Receiving Benefits.
For most people, paying Social Security tax past age 70 is a simple reality of continued employment. The key is to distinguish between your obligation to pay taxes on earned income and the separate matter of paying income tax on your Social Security benefits. Understanding these rules allows for more accurate financial planning in retirement, enabling you to make informed decisions about your future.
