Many people assume that collecting Social Security means they cannot work. That is not quite right. You can work and receive Social Security retirement benefits at the same time - but if you have not yet reached full retirement age, there are limits on how much you can earn before your benefits are temporarily reduced.
Here is what to know before you take that part-time job or start a side business.
What Is Full Retirement Age?
Full retirement age (FRA) is the age at which you qualify for your full, unreduced Social Security benefit. For anyone born in 1960 or later, FRA is 67. If you were born between 1955 and 1959, your FRA falls somewhere between 66 and 67. You can confirm your exact FRA using the Retirement Age Calculator at ssa.gov.
What Happens If You Work Before Reaching Full Retirement Age?
If you are receiving Social Security and have not yet reached full retirement age, the SSA applies what is called the retirement earnings test. This sets a limit on how much you can earn from work before your benefits are temporarily reduced.
For 2026, the limits are:
- Under full retirement age for the entire year: You can earn up to 24,480 dollars. For every 2 dollars you earn above that, 1 dollar is withheld from your benefits.
- The year you reach full retirement age: A higher limit applies - 65,160 dollars for the months before your birthday. For every 3 dollars you earn above that, 1 dollar is withheld, but only for the months before you reach FRA.
These limits apply to wages and net self-employment income. They do not apply to pensions, investment income, or other non-work income.
Does Working Before Full Retirement Age Permanently Reduce Your Benefits?
No. This is one of the most common misunderstandings about the earnings test. Any benefits withheld because you exceeded the earnings limit are not lost permanently. Once you reach full retirement age, the SSA recalculates your benefit and increases your monthly payment to credit you for the months benefits were withheld.
What Happens to Social Security Benefits After Full Retirement Age?
Can You Work as Much as You Want Once You Reach Full Retirement Age?
Once you reach your full retirement age, you can work full time, run a business, or earn any amount without any reduction in your Social Security benefits. If you are younger than full retirement age, your benefits may be reduced if your earnings exceed certain annual limits. Once you reach full retirement age, your monthly payment stays the same regardless of what you earn.
In fact, continuing to work may increase your future benefit if your current earnings are among your highest-earning years on record. The SSA reviews your earnings record annually and adjusts your benefit upward if the new earnings improve your average.
What Counts as Earnings Under the Earnings Test?
The SSA counts wages from a job and net profit from self-employment. It does not count:
- Pension payments
- Annuity income
- Investment returns
- Interest
- Veterans benefits — these are not counted as earnings under the Earnings Test, but if you receive SSI, VA benefits count as unearned income and may reduce your SSI payment after a $20 general exclusion
- Other government or military retirement benefits
A Note on Claiming Early
If you claim Social Security before full retirement age and plan to keep working, it is worth doing the math first. Depending on your earnings, the short-term reduction combined with the permanent reduction that comes with early claiming may not be the right move for your situation. A financial advisor can help you model the options.
Where to Learn More
- SSA - Retirement Benefits While Working - ssa.gov/benefits/retirement/planner/whileworking.html The official SSA page explaining how work affects your retirement benefits, with examples and an earnings test calculator.
- SSA Retirement Age Calculator - ssa.gov/benefits/retirement/planner/ageincrease.html Enter your birth year to find your exact full retirement age.
- SSA Retirement Earnings Test Calculator - ssa.gov/benefits/retirement/planner/whileworking2.html Estimate how much your benefit would be reduced based on your expected earnings.
Disclaimer: This article provides general information for educational purposes only and does not constitute financial or legal advice. Social Security earnings limits update each year - confirm current figures at ssa.gov before making decisions.