Working while collecting Social Security can make good sense for some seniors. Those who want to work part-time but still enjoy the retirement lifestyle may decide that Social Security is a good way to supplement their paychecks. On the other hand, people who are collecting retirement benefits may find that Social Security isn’t enough to live on by itself and may need the money from a paycheck to help make ends meet.
However, if you are planning on double-dipping and working while collecting benefits, there is a very important rule to know first. You must understand it to ensure that your attempts at achieving financial stability are not derailed.
Working while collecting Social Security can impact your monthly benefits
The first and most basic rule that you should be aware of is that you are allowed to work as much as you want and collect Social Security at the same time — as long as you have reached your full retirement age (FRA) for Social Security. Full retirement age is the age when you get your standard benefit. It’s based on when you were born. Here’s when your is:
- 67 if you were born in 1960 or later
- 66 and 10 months if you were born in 1959
- 66 and 8 months if you were born in 1958
- 66 and 6 months if you were born in 1957
- 66 and 4 months if you were born in 1956
- 66 and 2 months if you were born in 1955
- 66 if you were born in 1943 to 1954
After you have reached this milestone, there’s no limit to what you can earn and even if you collect millions from a job, you can still get your full Social Security payment. If you have not yet reached your FRA, though, things are different. It’s entirely possible that working too much could lead to forfeiting some of your benefits.
How much can you work without impacting Social Security?
The specific amount you can earn without your benefits being impacted will vary depending on whether or not you will hit FRA at all during the year when you are working.
- In 2025, if you won’t reach FRA at all during the year, the Social Security Administration indicates that you can earn up to $23,400 without impacting benefits. Once you have hit that limit, though, you lose $1 in benefits for every $2 earned above it.
- If you will hit FRA at some time during the year but have not done so yet, there’s a different rule. You can earn up to $62,160 before benefits are impacted and you lose $1 in benefits for every $3 above the limit.
The good news is that when you lose benefits due to working too much, these benefits are not lost forever.
Social Security withholds entire checks based on the amount of benefits you forfeit. Each month you don’t get a check, the early filing penalty that applies for early claiming will be eliminated. When you reach your full retirement age, benefits will be recalculated to account for this change. So, for example, if you faced 6.7% in early filing penalties for retiring a year before your FRA but you subsequently worked enough to give up six months of those benefits, you would “get credit” for six months of early filing penalties. Your benefits would increase at FRA when they are recalculated to account for the impact of those unpaid benefits.
Ultimately, working while collecting Social Security can be a good thing with some caveats. If you haven’t hit FRA and you work, you will potentially lose some benefits now but get more money later. If you are beyond your FRA, you won’t lose anything from Social Security and will simply enjoy extra income coming in.
The one downside, though, is if you were counting on getting both Social Security and a big paycheck at the same time early in retirement, this isn’t likely to work out for you and you’ll need to modify your plans accordingly.
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