How working while on Social Security could help or hurt your benefits

If you are hoping to collect Social Security benefits and have a job, there are rules you need to know. Unfortunately, your decision to try to collect Social Security and get a paycheck could actually end up causing benefits to disappear temporarily in some cases. On the other hand, there are times when working and getting Social Security benefits will raise your monthly payments for the rest of your life.

Here’s how working while getting Social Security could hurt your monthly checks, or help you make your benefits grow. 

Working too much can lead to your benefits being lost

The first big thing that you need to know is that working and earning too much money will lead to temporarily losing monthly Social Security checks if you are under your full retirement age (FRA).  Earning limits can lead to the Social Security Administration withholding entire monthly checks once you have crossed a certain threshold. 

In 2026, here’s exactly when you start to lose monthly payments from the Social Security Administration. 

• If you will not reach your FRA throughout the whole 2026 year, you lose $1 for every $2 earned above $24,480
• If you will reach FRA at some point in 2026 but haven’t hit your FRA yet, you lose $1 for every $3 earned above $65,160. 

Entire checks are withheld based on the amount you earn, which means in some months you will have to rely solely on your paycheck with no Social Security funds coming in at all. Since these earning limits are not very high, particularly for those who won’t hit FRA at all during the year, there is a very significant chance that working is going to have a big adverse impact on your ability to rely on Social Security. 

Of course, you don’t lose the money forever. At your full retirement age, benefits are recalculated, and you get credit for the months that no benefits were paid to you. This results in an increase in monthly payments. So, while working too much causes short-term financial pain, it can help you get bigger checks later.

Working can also lead to your average wages increasing

Working can impact your benefits in another important way, too. If you earn a lot of money, you may raise your average wage. And since Social Security benefits are based on average wages, the result could be a bigger monthly paycheck. 

See, the Social Security benefits formula provides you with a monthly benefit equal to a specific percentage of average indexed monthly earnings (AIME). And it calculates AIME by adjusting wages throughout your career for inflation and calculating the average you earned during the 35 years you made the most money.

If you earn a lot of money late in life and you earned less earlier, some of the lower-earning years will be replaced in your AIME calculation if you work longer later. The more years you work into traditional “retirement” at a high salary, the more lower-earning years you could potentially prevent from being included in your AIME calculation. Getting these higher-earning years into the benefit calculation instead could result in a significant increase in your monthly Social Security check, depending on just how much more you are earning now than you did earlier.

Ultimately, working most often is a net benefit. Not only can you potentially increase your AIME and avoid some early filing penalties, but you can also earn income from work to save more. You just need to be aware of the temporary hit you’ll take if you try to double-dip and get benefits and a paycheck, as this option is off the table for higher earners who are under their full retirement age.