Working During Social Security Retirement: Key Things You Need to Know

It's easy to associate collecting Social Security benefits Upon retiring, you have the option to continue working while collecting your benefits. This situation does present certain short-term challenges, yet these mainly hinge on the timing of when you initiated your benefit claims.

If your birth date falls on or after January 2, 1960, your full retirement age is 67; however, you have the option to start receiving Social Security benefits earlier. as early as 62 The problem with earning an income while collecting benefits before reaching your full retirement age is that a part of your monthly Social Security Administration benefit gets deducted. The important point here is that these funds aren’t permanently lost; they’re simply held back.

Here, we’ll dissect what occurs when you simultaneously earn wages and receive your retirement benefits, along with the modifications that will take place over time.

To learn more, be sure not to miss the Social Security payment schedule and What actions should you take if your Social Security payment doesn’t arrive? .

What occurs if you receive benefits while also being employed?

If you're employed, receiving Social Security benefits, and under your full retirement age, your benefit amount will decrease. The SSA will deduct $1 for each $2 you earn over the yearly threshold. In 2025, this limit will be set at $23,400.

The SSA's guide on How employment impacts your benefits provides a graph to help you understand the potential amount you might receive, depending on your benefit sum and income.

If you turn 65 in 2025, $1 will be deducted for each $3 you earn over $62,160. The Social Security Administration (SSA) will consider only income received up until the month prior to reaching your full retirement age; they won’t factor in earnings from the whole year. This is due to the fact that starting with the month when you achieve your full retirement age, additional earnings will have no impact on reducing your benefits regardless of their total value.

Earning an income while collecting Social Security boosts your benefits at a later time.

If you held employment and collected benefits prior to reaching your full retirement age, the Social Security Administration (SSA) will adjust your benefit sum upon your attainment of that age. This adjustment accounts for the periods during which your benefits were reduced. Consequently, you have the opportunity to boost your benefit amount once you turn 67 by continuing to work before hitting that full retirement mark.

There are alternative methods to increase your monthly benefit amount.

Initially, when you file for Social Security retirement benefits, the SSA considers the 35 years during which you had the highest earnings over your career to calculate your monthly benefit amount.

If you keep working and collecting benefits, and your income in 2025 surpasses that of any of the top-earning 35 years used to calculate your benefits so far—one of those lower-earning years will be swapped out with your 2025 earnings. This new figure would then be included in the calculation, potentially leading to an increased monthly benefit amount. Should your anticipated yearly earnings fluctuate while you’re benefiting from Social Security payments, it’s up to you to inform the SSA about these changes—both increases and decreases—in your expected annual earnings.

And finally, the beneficiaries can also consistently anticipate the benefits from it. Social Security cost-of-living adjustment (COLA) raise to increase their benefit amount, even if it is a small one, similar to this year .

What steps should I follow to apply for my retirement benefits?

If you believe you're prepared to file for retirement benefits, you ought to begin by setting up an application. My Social Security account And locate the "apply for benefits" page. You may also want to review our guide on How to file for Social Security retirement benefits , too.

To learn more about Social Security and retirement, be sure not to miss out on this additional information. aspects you ought to understand many years prior to your retirement .