Social Security does not have an income limit for who can receive benefits, but it does reduce your payments if you earn too much from work before full retirement age
You can receive Social Security at any income level. There is no rule that says "if you make more than X dollars per year, you cannot get benefits." However, if you claim benefits before reaching your full retirement age and you work, Social Security will withhold part of your payment based on your earnings from employment.
The earnings test — the rule that reduces your payment — applies only to people who have not yet reached full retirement age. Once you reach full retirement age, you can earn any amount without any reduction to your benefit. The amount withheld depends on how much you earn and which year you are in relative to reaching full retirement age.
Key Takeaways
- Social Security has no income limit for receiving benefits, but earnings from work can reduce your payment if you have not reached full retirement age.
- In 2024, if you are under full retirement age for the entire year, Social Security withholds $1 for every $2 you earn above $23,400.
- In the year you reach full retirement age, the withholding rate is $1 for every $3 earned above $62,160, but only for earnings before the month you reach full retirement age.
- Once you reach full retirement age, earnings do not reduce your benefit at all, no matter how much you make.
- Unearned income — such as pensions, investment returns, rental income, or interest — does not count toward the earnings test.
How the earnings test works before full retirement age
The earnings test is a formula Social Security uses to reduce your monthly payment if you work and have not yet reached full retirement age. It applies only to wages or self-employment income — money you earn from a job or business you own. It does not apply to pensions, investment income, rental income, or other unearned money.
Social Security counts only earnings from the current year forward. If you earned a large amount in a previous year, that does not affect your current benefit. The agency looks at your gross income before taxes.
The withholding amounts change each year because they are tied to a wage index. For 2024, the thresholds and rates are set by law. You can contact Social Security directly or check their website for the current year's numbers, as they shift annually.
Earnings limits and withholding rates for 2024
| Your situation | Earnings threshold | Withholding rate |
|---|---|---|
| Under full retirement age for the entire year | $23,400 | $1 withheld for every $2 earned above the threshold |
| Year you reach full retirement age (earnings before the month you reach it) | $62,160 | $1 withheld for every $3 earned above the threshold |
| Reached full retirement age | No limit | No withholding |
These numbers are set by federal law and change each year. Social Security publishes updated thresholds in October or November for the following year. If you are close to one of these limits, contact Social Security to confirm the current year's amounts before making decisions about work.
What counts as earnings and what does not
Social Security counts only wages from employment and net income from self-employment. If you work for an employer, your gross wages count — the amount before taxes are taken out. If you are self-employed, Social Security counts your net profit after business expenses.
These do not count toward the earnings test: pensions (including military or government pensions), annuities, investment income, interest, dividends, capital gains, rental income, royalties, or money from selling property. If you receive a lump-sum payment from a former employer — such as severance or unused vacation pay — it counts only in the year you actually receive it, not when you earned it.
Bonuses, commissions, and tips all count as earnings in the year you receive them. If you own a business, only the net profit counts, not the gross revenue.
How withholding actually reduces your payment
When Social Security withholds money because of the earnings test, it does not simply reduce your monthly check. Instead, the agency calculates how much you owe based on your annual earnings, then suspends your benefits month by month until the debt is paid off.
For example, if you are under full retirement age and earn $30,000 in a year, you have earned $6,600 above the $23,400 threshold. Social Security withholds $1 for every $2 above the threshold, so you owe $3,300. The agency then suspends your monthly benefit until $3,300 has been withheld. If your monthly benefit is $1,500, your benefits would be suspended for approximately two months, and you would receive payments again in month three.
You do not have to repay this money out of pocket. Social Security simply does not send you a check for those months. Once the withholding is satisfied, your full monthly benefit resumes.
What happens in the year you reach full retirement age
The year you reach full retirement age is treated differently. Social Security uses a higher earnings threshold ($62,160 in 2024) and a lower withholding rate ($1 for every $3 earned above that amount). However, this rule applies only to earnings you receive before the month you reach full retirement age.
Once you reach full retirement age — even if it is mid-year — earnings no longer reduce your benefit at all. If your full retirement age is June 2024, earnings from January through May count toward the earnings test, but earnings from June onward do not affect your payment.
This transition can be important if you plan to work through the year you reach full retirement age. Contact Social Security to confirm your exact full retirement age, because the rules shift the month you reach it.
Full retirement age and when the earnings test ends
Your full retirement age depends on the year you were born. For people born between 1943 and 1954, full retirement age is 66. For people born between 1955 and 1960, it rises gradually from 66 and 2 months to 66 and 10 months. For people born in 1960 or later, full retirement age is 67.
Once you reach your full retirement age, the earnings test disappears entirely. You can work and earn any amount without any reduction to your Social Security benefit. This is true regardless of how much you earn or whether you continue working indefinitely.
If you claimed benefits before reaching full retirement age and were subject to withholding, Social Security recalculates your benefit at full retirement age to account for the months you did not receive a payment. This recalculation increases your monthly payment going forward, so the months you were withheld do not represent a permanent loss.
Frequently Asked Questions
Does my spouse's income affect my Social Security benefit?
No. Social Security looks only at your own earnings from work. Your spouse's income, savings, or other resources do not reduce your benefit. However, if your spouse also receives Social Security and is under full retirement age, their own earnings are subject to the earnings test separately.
If I delay claiming Social Security, do I still have to follow the earnings test?
No. The earnings test applies only to people who have claimed benefits. If you have not yet claimed, you can work and earn any amount without affecting your future benefit. When you do claim, your benefit will be higher because you waited, and the earnings test will apply only if you claim before full retirement age.
What if I am self-employed — how do I report my earnings?
Report your net self-employment income (profit after business expenses) on your tax return. Social Security uses your tax return to verify your earnings. If you expect your income to change significantly during the year, contact Social Security to update your estimate, because withholding is based on actual earnings, not predictions.
Can I work part-time and still receive Social Security?
Yes. Part-time work counts the same as full-time work under the earnings test — only the total amount you earn matters, not how many hours you work. If your part-time earnings stay below the annual threshold for your age, your benefit is not reduced.
What if I earn money from a side business but it is not my main job?
Social Security counts all self-employment income, whether it is your primary business or a side income. If you are self-employed, report your net profit from all businesses combined on your tax return, and Social Security will count that total toward the earnings test.