Your Full Retirement Age (FRA) and the Earnings Test
Full Retirement Age (FRA) is the age at which you can begin receiving your full, unreduced Social Security retirement benefits. For everyone born in 1960 or later, your FRA is 67. The amount you can earn while collecting Social Security benefits hinges on your age relative to this benchmark. The Social Security Administration (SSA) uses what is called the 'Retirement Earnings Test' (RET) to determine if your benefits should be temporarily reduced due to earned income.
The Zero Earnings Limit at Full Retirement Age
For a person who is age 67 and has already reached their FRA, the rules are straightforward: there is no limit on how much you can earn from work while collecting your full Social Security benefits. You can continue working part-time, full-time, or start a business and your monthly Social Security payment will not be affected by your earned income. This is a significant change from the years leading up to your FRA, where earnings limits are strictly enforced.
What if I turn 67 this year?
If you are a 67-year-old but will not reach your FRA until later in the year, a different set of rules applies for the months leading up to your birthday. For example, a person born in August 1958 reached their FRA of 67 in August 2025. In the months before August 2025, they were subject to a different earnings limit and penalty.
The Special Rule for the Year You Reach FRA
In the calendar year that you reach your full retirement age, the SSA applies a more generous earnings test for the months before your birthday month. For 2025, that higher limit is $62,160. The SSA will deduct $1 from your benefits for every $3 you earn above this limit during that period.
How the 2025 rules apply to someone turning 67
Consider someone who reaches their 67th birthday in August 2025. The special earnings test applies only from January through July. Starting in August, your earnings have no effect on your benefits, no matter how much you earn. The deduction for excess earnings only applies to the income you earned in the months before you officially reached your FRA.
What Types of Income Count Against the Earnings Limit?
When the Social Security Administration calculates your earnings for the Retirement Earnings Test, they only consider certain types of income.
Included in the earnings test:
- Wages from a job
- Net earnings from self-employment
Excluded from the earnings test:
- Pensions and annuities
- Investment income (interest, dividends, capital gains)
- Rental income
- Veterans or other government benefits
Withheld Benefits Are Not Lost
One of the most common misconceptions is that benefits withheld due to the earnings test are simply lost forever. This is not the case. Any benefits that were withheld before you reached your FRA are credited back to you in the form of a permanent increase to your future monthly benefit amount. The SSA automatically recalculates your benefit at your FRA to account for the months that benefits were withheld. Essentially, the withheld benefits are not a punishment, but an adjustment that increases your future payments.
Navigating the Rules: What's Your Situation?
To better understand how the Social Security earnings test affects you, consider your age relative to your FRA. The comparison below clarifies the different earnings limits and their impact.
| Feature | Before Full Retirement Age | In the Year You Reach FRA (2025) | At or After Full Retirement Age |
|---|---|---|---|
| Annual Earnings Limit | $23,400 (in 2025) | $62,160 (in 2025) | No limit |
| Benefit Deduction | $1 for every $2 over the limit | $1 for every $3 over the limit | No deduction |
| Period Covered | All months of the year | Months before your birthday month | All months of the year |
| Withheld Benefits | Withheld benefits lead to a permanently higher benefit later. | Withheld benefits lead to a permanently higher benefit later. | No benefits are withheld based on earnings. |
Strategies for Working Past FRA
Continuing to work past your FRA at 67 offers several potential advantages. Your monthly benefit will increase by 8% for each year you delay claiming beyond your FRA, up to age 70. If you continue to work and earn a higher income, this may also increase your Social Security benefit. The SSA uses your 35 highest-earning years to calculate your benefit. If you are working at a higher salary now than in a past year, your new earnings can replace one of your lower-earning years, potentially boosting your monthly payment.
For more detailed information on working and retirement, visit the official Social Security Administration website at https://www.ssa.gov/benefits/retirement/planner/whileworking.html.
Conclusion
For a 67-year-old who has reached their full retirement age, the straightforward answer is that there is no limit on what they can earn while collecting Social Security benefits. This freedom allows retirees to supplement their income without penalties. However, understanding the specific rules for the year you turn 67, including the higher, time-limited earnings cap, is essential for proper financial planning. Knowing how benefits are recalculated ensures that any benefits withheld due to working are not lost, but rather returned to you in the form of higher future payments. By carefully considering your circumstances and maximizing your benefits, you can confidently navigate your finances during retirement.
