How much can I make if I retire at 65 and still work?

Oct 15, 2025 3 min read •

Retirement Social Security Employment

For those turning 65 today, the full retirement age (FRA) is 67, not 65, which significantly impacts how much you can make if you retire at 65 and still work. Understanding the Social Security Administration's (SSA) earnings test is crucial, as it determines how your continued employment will affect your benefit payments until you reach your FRA.

Quick Summary

This guide explains the Social Security Administration's earnings limits and how working at age 65 impacts your retirement benefits. It clarifies the difference in rules for those below full retirement age and outlines the temporary benefit withholding process, which eventually leads to a permanent increase in future payments.

Key Points

Earnings Limit at 65: If you retire and work at 65, which is before the full retirement age (FRA) for most people, your Social Security benefits are subject to an earnings limit. For 2025, this limit is $23,400.
Benefit Withholding: For every $2 you earn over the annual limit before reaching your FRA, the Social Security Administration will temporarily withhold $1 from your benefits.
Recalculated Higher Benefits: Any benefits withheld are not permanently lost; your monthly benefit will be recalculated and increased at your full retirement age to account for the deductions.
No Earnings Limit at FRA: Once you reach your full retirement age (67 for those born in 1960 or later), you can earn any amount of income without your Social Security benefits being reduced.
Increased Future Benefits: Continuing to work can increase your lifetime benefits, as a higher-earning year can replace a lower-earning year in the 35 years used to calculate your benefit.
Potential for Taxation: Earning extra income can increase your total taxable income, which may result in a portion of your Social Security benefits being subject to federal income tax.
Medicare Considerations: Working after 65 may impact your Medicare enrollment, particularly for Part B, and higher incomes can lead to higher Medicare premiums.

Navigating Social Security Rules When You Retire at 65

When you decide to retire and claim Social Security benefits at age 65, your employment income can affect your benefits because you are retiring before your full retirement age (FRA). For anyone born in 1960 or later, the FRA is 67. This means you are subject to the Social Security earnings test, which limits how much you can earn before your benefits are reduced. Benefits withheld due to earnings are not lost; they increase your future monthly payments once you reach your FRA.

The Annual Earnings Limit for 2025

For 2025, the Social Security Administration (SSA) has specific earnings limits. If you are under your FRA for the entire year, the limit is lower. If you reach your FRA during the year, a higher limit applies to earnings before your birthday month.

Below FRA for the entire year: In 2025, you can earn up to $23,400. For every $2 earned above this, the SSA deducts $1 from benefits.
Reaching FRA during the year: In 2025, you can earn up to $62,160 before your FRA month. The SSA deducts $1 for every $3 earned above this limit during that period. Once you reach your FRA, the limit no longer applies.

Understanding the Social Security Recalculation

When you reach your FRA, the SSA recalculates your benefit amount, giving you credit for any months where benefits were withheld due to earnings. This results in a higher monthly payment for life. Working can also increase benefits if your new earnings replace a lower-earning year in your top 35 years of earnings used for calculation.

How Working Can Increase Your Benefits Over Time

Continuing to work can boost your payments as the SSA uses your 35 highest-earning years to calculate your benefit. If your current earnings are higher than a year in your record, the SSA replaces the lower year, potentially increasing your monthly payment. The SSA reviews records annually and notifies you of any increase.

Earnings and Benefits: Pre-FRA vs. Post-FRA

This table highlights the differences in rules based on your age relative to your full retirement age (FRA), particularly for those retiring at 65.


Feature	Working Before Full Retirement Age (e.g., at 65)	Working at Full Retirement Age or Older
Earnings Limit	Yes, an annual limit applies ($23,400 for those under FRA all year in 2025).	No limit on earnings.
Benefit Reduction	Benefits reduced if earnings exceed the limit.	Benefits are not reduced.
Benefit Withholding Rate	$1 withheld for every $2 earned over the limit.	N/A
Benefit Recalculation	Withheld benefits lead to higher monthly payments at FRA.	N/A
Potential Benefit Increase	Higher earnings can replace lower-earning years, increasing lifetime benefits.	Continued earnings can increase benefits by replacing lower-earning years.
Tax Implications	Higher earnings may make a portion of benefits taxable.	Up to 85% of benefits may be taxable depending on income.

Factors to Consider When Working in Retirement

Beyond the earnings test, consider how working after 65 affects Medicare eligibility and taxes. If you have employer health coverage, consult your personnel office before enrolling in Medicare Part B to avoid penalties. Part-time work can provide supplemental income and free time. Additional income can also delay using retirement savings, allowing assets to grow. Your financial needs, health, and goals should guide your decision. The SSA provides resources like an online earnings test calculator.

Conclusion

For those retiring at 65 and working, earnings limits apply before full retirement age (67), but withheld benefits are not lost and increase future payments. Working provides extra income and can increase lifetime benefits by improving your earnings record. Understanding these rules is vital for informed financial decisions.

An authoritative outbound link to the Social Security Administration is appropriate here: ssa.gov/benefits/retirement/planner/whileworking.html.

Frequently Asked Questions

In 2025, the earnings limit for someone under their full retirement age (FRA) for the entire year is $23,400. For every $2 you earn above this limit, the Social Security Administration (SSA) will deduct $1 from your benefits.

No, any benefits withheld due to the earnings limit are not permanently lost. Once you reach your full retirement age (FRA), your monthly benefit is recalculated to credit you for the months benefits were withheld, resulting in higher payments for the rest of your life.

In the year you reach your full retirement age, a higher earnings limit applies ($62,160 in 2025). The SSA will withhold $1 for every $3 you earn above this limit, but only for the months before you reach your FRA. Once you hit your FRA month, the limit no longer applies.

Yes. The Social Security Administration bases your benefit on your 35 highest-earning years. If your earnings at age 65 are higher than an earlier year in your record, the SSA will automatically replace that lower year, which can result in a higher lifetime benefit.

Income from a part-time job will count toward your earnings limit if you are under your full retirement age. Additionally, the extra income could push your combined income (adjusted gross income, nontaxable interest, and half of your Social Security benefits) over a certain threshold, making a portion of your Social Security benefits taxable.

Your spouse's income does not directly affect your personal Social Security benefits. However, if you file a joint tax return, the combined income is used to determine if your Social Security benefits are taxable.

You can earn an unlimited amount from working without it affecting your benefits once you reach your full retirement age (FRA). For anyone born in 1960 or later, this is age 67.

References

Medical Disclaimer

This content is for informational purposes only and should not replace professional medical advice. Always consult a qualified healthcare provider regarding personal health decisions.