It's easy to associate collecting Social Security benefits When retiring, you have the option to continue working while collecting your benefits. This situation does present certain short-term challenges, yet these mainly hinge on the timing of when you first started receiving your benefits.
If your birth date falls on or after January 2, 1960, your full retirement age is 67; however, you have the option to start receiving Social Security benefits earlier. as early as 62 The "problem" when collecting benefits and still working prior to reaching full retirement age is that a part of your monthly Social Security Administration payout will be deducted. The important term here is "deducted"—it means the money isn’t permanently lost but rather set aside temporarily.
Here, we’ll dissect what occurs when you earn income from employment and receive your retirement benefits concurrently, along with the modifications that will occur over time.
To learn more, be sure not to miss the Social Security payment schedule and What actions should you take if your Social Security payment doesn’t arrive? .
What occurs if you receive benefits while also being employed?
If you're employed, receiving Social Security benefits, and under your full retirement age, your benefit amount will decrease. The SSA will deduct $1 for each $2 you earn over the yearly cap. In 2025, this limit is set at $23,400.
The SSA's guide on How employment impacts your benefits provides a graph to help you understand the potential amount you could get, depending on your benefit sum and income.
If you turn 65 in 2025, $1 will be deducted for every $3 over $62,160 that you earn. The Social Security Administration (SSA) will consider income only until the month prior to reaching your full retirement age; they won’t take into account your total yearly earnings. This is due to the fact that starting from the month when you attain your full retirement age, additional earnings will have no impact on reducing your benefits regardless of the amount you make.
Earning an income while collecting Social Security can boost your benefits at a later time.
If you earned wages and collected benefits prior to reaching your full retirement age, the Social Security Administration (SSA) will adjust your benefit amount starting from the month you turn that specific age. This adjustment provides compensation for the periods during which your benefits were reduced. Consequently, you have the opportunity to increase your benefit amount upon turning 67 by continuing to work before attaining full retirement age.
There are alternative methods to increase your monthly benefit amount.
Initially, when you file for Social Security retirement benefits, the SSA considers your highest-earning 35 years of work to calculate your monthly benefit amount.
If you keep working and collecting benefits, and your income in 2025 surpasses that of any of the previous top-earning 35 years—one of those years would be substituted with your 2025 earnings, leading to an increased monthly benefit amount. Should your earnings fluctuate while you’re on benefits, it’s your duty to inform the Social Security Administration about any anticipated rise (or drop) in your yearly income.
And finally, the beneficiaries can also consistently anticipate the benefits from it. Social Security cost-of-living adjustment (COLA) boost to increase their benefit amount, even if it is A small one, similar to what we see this year. .
What steps should I follow to apply for retirement benefits?
If you believe you're prepared to file for retirement benefits, you ought to begin by establishing a My Social Security account And locate the "apply for benefits" page. You can also refer to our guide on How to file for Social Security retirement benefits , too.
To learn more about Social Security and retirement, be sure not to miss out on this additional information. aspects you ought to understand many years prior to your retirement .