You can work and collect Social Security, but your benefits may be reduced if you earn above a certain amount before your full retirement age
Social Security does not stop you from working. The question is whether working will reduce your monthly benefit check. The answer depends on your age and how much you earn.
If you have reached your full retirement age, you can earn any amount without losing benefits. If you have not yet reached full retirement age, Social Security reduces your benefit by $1 for every $2 you earn above an annual limit. The limit changes each year — in 2024 it is $23,400, but you should check the current year's figure on ssa.gov before making work decisions.
The reduction applies only to the year you turn full retirement age and only to earnings before the month you reach that age. Once you hit full retirement age, the earnings limit disappears entirely.
Key Takeaways
- If you have not reached full retirement age, Social Security reduces your benefit by $1 for every $2 you earn above the annual limit, which is $23,400 in 2024.
- The earnings limit does not apply once you reach your full retirement age, no matter how much you work.
- Only earned income counts toward the limit — investment income, pensions, and rental income do not reduce your benefits.
- You must report your earnings to Social Security, and the agency will adjust your payments automatically based on what you report.
- If you earned more than expected in a year, Social Security may withhold future payments, but you can request a new estimate if your circumstances change.
How the earnings limit works before full retirement age
The reduction is straightforward math. If you earn $25,400 in 2024 and the limit is $23,400, you are $2,000 over. Social Security withholds $1 for every $2 over the limit, so $1,000 of your annual benefits are withheld. If your monthly benefit is $1,500, that $1,000 comes out of your checks over the year — roughly $83 per month.
The withholding happens automatically. You do not have to ask for it or fill out a form. Social Security uses the earnings you report on your tax return or that you tell them about directly. If you work for an employer, they do not report your earnings to Social Security — you do, either through your tax return or by contacting Social Security directly.
The limit applies to the calendar year, not to a rolling 12-month period. If you stop working in June and earn $15,000 for the year, you are under the limit and no benefits are withheld, even if you had earned more in previous years.
What counts as earnings and what does not
Earned income means wages from a job, net income from self-employment, and bonuses or commissions. It does not include vacation pay you receive after you stop working, severance, or back pay from a previous job — those count only in the year you actually receive them.
These do not count toward the limit: investment income, interest, dividends, capital gains, rental income, pension payments, annuities, or money from an IRA or 401(k). If you live on investment income and do not work, your benefits are never reduced. If you work part-time and also have investment income, only the wages matter.
If you are self-employed, you report net earnings — income minus business expenses. You do not count the gross revenue from your business.
The year you reach full retirement age
The rules change in the year you turn full retirement age. For that year only, Social Security uses a different, higher limit that applies only to earnings before the month you reach full retirement age. In 2024, this limit is $62,160, and the withholding rate is $1 for every $3 earned over the limit.
Once you reach full retirement age — even if it is mid-year — the limit no longer applies to any earnings for the rest of that year or any year after. If you turn 67 in June and earn $80,000 that year, only the earnings from January through May count toward the limit. Earnings from June onward do not reduce your benefits at all.
After the month you reach full retirement age, you can work and earn as much as you want without any reduction to your Social Security benefits.
How to report your earnings to Social Security
You can report earnings in three ways: through your tax return, by phone, or online through your my Social Security account at ssa.gov. If you report through your tax return, Social Security receives the information when the IRS processes it, usually several months after you file.
If you want to report sooner — for example, if you think you will go over the limit and want Social Security to adjust your payments before you receive a large withholding — you can call Social Security at 1-800-772-1213 or log into your my Social Security account and report your expected earnings for the year.
Social Security will ask for your gross earnings and the month you expect to stop working, if applicable. They use this information to estimate how much to withhold from your monthly checks.
What happens if you earn more than you expected
If you report estimated earnings and then earn more than you said, Social Security will adjust your withholding. They may reduce your monthly checks further, or they may wait until your tax return is filed and then adjust your benefits for the following year.
If Social Security withholds too much — for example, if you estimated you would earn $30,000 but only earned $22,000 — you do not get a refund. Instead, Social Security adds back the overpaid withholding to your benefits starting in January of the following year. You can also request a new estimate at any time if your work situation changes.
If you think Social Security has made an error in calculating your withholding, you can request a recalculation by calling 1-800-772-1213 or visiting your local Social Security office.
Working while collecting benefits before full retirement age
Many people collect Social Security before full retirement age and continue working. This is allowed, but your benefits will be reduced if you earn over the limit. Some people find it makes sense to work part-time and accept a smaller benefit check. Others delay claiming until full retirement age so they can work without any reduction.
If you have not yet claimed Social Security but are thinking about it, remember that claiming before full retirement age also means your monthly benefit will be permanently lower — not just temporarily reduced by the earnings limit. The earnings limit is a separate reduction on top of that permanent reduction. This is an important distinction: the earnings limit is temporary and goes away at full retirement age, but the reduction for claiming early is permanent.
Frequently Asked Questions
Does my employer report my earnings to Social Security?
No. Your employer reports your earnings to the IRS on your W-2 form, but Social Security gets the information from your tax return or from you directly. You are responsible for telling Social Security about your earnings, either when you file your taxes or by contacting them directly.
What if I work for myself — how do I report self-employment income?
You report net self-employment income (income minus business expenses) on your tax return using Schedule C. Social Security receives this information when the IRS processes your return. If you want to report sooner, you can contact Social Security directly and give them your estimated net earnings for the year.
Can I work and collect Social Security if I am under full retirement age?
Yes, but your benefits will be reduced if you earn over the annual limit. In 2024, the limit is $23,400. For every $2 you earn above that, Social Security withholds $1 from your benefits. Once you reach full retirement age, this limit no longer applies.
Does my pension or investment income count toward the earnings limit?
No. Only earned income from work counts. Pensions, annuities, investment income, rental income, and withdrawals from retirement accounts do not reduce your Social Security benefits, no matter how much you receive.
What if Social Security withheld too much from my benefits?
You do not receive a refund, but Social Security adds the overpaid amount back to your benefits starting in January of the following year. If you think an error was made, you can request a recalculation by calling 1-800-772-1213.