What Social Security allows you to earn depends on your age and whether you have reached your full retirement age
If you are under your full retirement age, Social Security reduces your benefit by $1 for every $2 you earn above an annual limit. That limit changes each year — it was $23,400 in 2024, but you should check the current year's figure with Social Security directly. The reduction only applies to earnings before the month you reach full retirement age.
Once you reach your full retirement age, there is no earnings limit. You can work and earn as much as you want without any reduction to your benefits. This is true whether you continue working full-time or part-time.
If you are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), the rules are different and more restrictive. Those programs have work incentives built in, but they also have lower thresholds before benefits are affected.
Key Takeaways
- Before full retirement age, you lose $1 in benefits for every $2 earned above the annual limit, which changes yearly and was $23,400 in 2024.
- Once you reach full retirement age, you can earn unlimited income without any reduction to your Social Security benefits.
- Only earned income counts toward the limit — investment income, pensions, and annuities do not affect your benefits.
- If you are on SSDI or SSI, work incentives allow some earnings, but the rules are stricter and you should contact Social Security before taking a job.
How the earnings limit works before full retirement age
The earnings test applies only to people who have not yet reached their full retirement age. Your full retirement age depends on your birth year — it ranges from 66 to 67 for most people receiving benefits now. You can find your exact full retirement age on your Social Security statement or by calling Social Security.
If you earn more than the annual limit, Social Security withholds $1 for every $2 over that amount. This is not a penalty or a tax — it is a temporary reduction in your monthly benefit. The money is not lost. Social Security recalculates your benefit when you reach full retirement age to account for the months benefits were withheld, and you receive a higher monthly payment going forward to make up for it.
The earnings limit applies only to the calendar year. If you earn $30,000 in one year but only $10,000 the next, you are only subject to the reduction in the year you earned $30,000. There is no cumulative penalty across years.
What counts as earnings and what does not
Only wages and self-employment income count toward the earnings limit. If you work for an employer and receive a W-2, that counts. If you are self-employed and file Schedule C on your tax return, that counts. Bonuses, commissions, and vacation pay all count as earnings in the year you receive them.
Money that does not count includes investment income, interest, dividends, capital gains, rental income, pensions, annuities, and insurance payouts. If you live off your savings or investment returns, none of that affects your Social Security benefit. Royalties and book sales also do not count as earnings for this purpose.
If you own a business, Social Security counts your net profit (revenue minus business expenses), not your gross revenue. You report this figure from your tax return.
How earnings affect your benefit month to month
Social Security does not wait until the end of the year to reduce your benefit. The agency estimates your annual earnings when you report them and adjusts your monthly payment accordingly. If you earn more than expected, your benefit may be reduced further. If you earn less, you may receive a larger payment or a refund of withheld benefits.
You are required to report your earnings to Social Security. You can do this online through your my Social Security account, by phone, or by mail. Social Security also receives wage information from the IRS, so underreporting is not practical.
In the year you reach full retirement age, there is a special rule. You can earn unlimited income in the months after you reach full retirement age without any reduction. Only earnings in the months before you reach full retirement age count toward the limit that year.
Work incentives if you are on SSDI or SSI
If you receive SSDI (Social Security Disability Insurance), you have access to work incentives that allow you to test your ability to work without immediately losing benefits. The Plan to Achieve Self-Support (PASS) program lets you set aside income and resources to reach a work goal. The Impairment Related Work Expenses (IRWE) program excludes certain work-related costs from your earnings calculation.
SSI has a different structure. The first $65 per month of earnings is excluded, and then 50 percent of remaining earnings are excluded. This means you can earn more before your benefit is fully eliminated compared to regular retirement benefits. However, SSI also has strict resource limits — if your savings exceed $2,000 (or $3,000 for a couple), you lose SSI may be able to access entirely.
Both SSDI and SSI have a trial work period that allows you to work and earn without losing benefits for nine months within a rolling 60-month window. After the trial work period, your benefits continue during an extended may be able to access period, though they may be reduced based on earnings. You should contact Social Security or a work incentives planning specialist before starting work to understand how it will affect your specific situation.
Reporting your earnings to Social Security
You can report earnings through your my Social Security account online, which is the fastest method. You can also call Social Security at 1-800-772-1213 or visit a local Social Security office in person. Have your Social Security number and information about your job ready when you report.
Social Security asks for your expected annual earnings and the month you expect to start work. If your actual earnings differ from what you reported, you can update the information. It is better to report higher earnings than you expect and receive a refund later than to underreport and face an overpayment that you will have to repay.
Keep records of your earnings — pay stubs, tax returns, or business records — in case Social Security asks for verification. The agency may request documentation to confirm the amount you reported.
What happens if you earn more than the limit
If you earn more than the annual limit before reaching full retirement age, your benefit is reduced, but you do not lose it entirely unless your earnings are very high. The reduction is straightforward: $1 withheld for every $2 over the limit. In some cases, your entire monthly benefit may be withheld for one or more months, but this is temporary.
This is not a permanent penalty. Once you reach full retirement age, the reduction stops and your benefit is recalculated to account for the months it was withheld. You will receive a higher monthly payment going forward, and you can earn as much as you want without any further reduction.
If Social Security overpays you because your earnings were higher than expected, you will be asked to repay the overpayment. You can request a repayment plan if you cannot pay it back in one lump sum. It is important to report earnings accurately to avoid this situation.
Frequently Asked Questions
Can I work part-time and still receive Social Security?
Yes. If you are under full retirement age, part-time earnings count toward the annual limit just like full-time earnings. If your part-time income stays below the limit, your benefit is not reduced. Once you reach full retirement age, you can work part-time or full-time with no reduction to your benefit.
Do I have to report my earnings every month?
No. You report your expected annual earnings once, usually when you start work or when you first contact Social Security about working. If your actual earnings differ significantly from what you reported, you should update the information. Social Security also receives wage data from the IRS, so the agency will know if you underreport.
What if I am self-employed — how do I report earnings?
Report your net self-employment income (profit after expenses) from your tax return. You can report this through your my Social Security account, by phone, or in person. Keep your business records and tax returns available in case Social Security asks for verification.
Will working affect my Medicare coverage?
No. Working does not affect your Medicare coverage if you are already enrolled. If you have not enrolled in Medicare yet, you should enroll when you become may be able to access, even if you are still working. Delaying enrollment can result in higher premiums later.
Can I work and receive benefits if I am on disability?
Yes, through work incentive programs. SSDI has a trial work period and extended may be able to access period that allow you to work and earn while keeping benefits. SSI allows you to exclude the first $65 per month of earnings plus 50 percent of the rest. Contact Social Security or a work incentives planning specialist before starting work to understand how it will affect your specific benefits.