Working While Drawing Social Security: What You Need to Know About Earnings Limits

Many people wonder if they can draw social security benefits while continuing to work. The answer is straightforward: yes, you absolutely can. Whether you’re phasing into retirement by reducing hours or launching a side project after retirement, combining employment income with Social Security is entirely possible. However, how much you can earn without affecting your payments depends on your age and specific circumstances.

Yes, You Can Claim Social Security and Keep Working

The fundamental rule is simple—working doesn’t automatically disqualify you from drawing social security. In fact, working during your benefit-collection years might even strengthen your payments over the long term. Each year, the Social Security Administration reviews beneficiaries’ earning records. If your current working year ranks among your 35 highest-earning years ever, your benefit gets recalculated upward, with the increase typically applied retroactively to January of that year.

This means your employment income could actually increase your Social Security payout permanently. The key catch: if you’re below your full retirement age and earning too much simultaneously, the government may temporarily reduce your payments based on an earnings test.

Understanding Earnings Limits Based on Your Full Retirement Age

A critical threshold exists called your full retirement age (FRA), which depends on when you were born. This age determines whether earnings limits apply to your Social Security and benefits:

• Born 1943-1954: Age 66
• Born 1955: Age 66 and 2 months
• Born 1956: Age 66 and 4 months
• Born 1957: Age 66 and 6 months
• Born 1958: Age 66 and 8 months
• Born 1959: Age 66 and 10 months
• Born 1960 or later: Age 67

Only those under their FRA face restrictions on how much they can earn while still drawing social security. Once you reach your full retirement age, earnings limits disappear entirely, and you can work without any impact on your benefits.

How Employment Income Reduces Your Social Security Payments

For individuals below full retirement age, the Social Security Administration applies a straightforward earnings test. The administration counts only earned income—wages, commissions, bonuses, and self-employment net profit—while excluding investments, pensions, annuities, interest, and government retirement benefits.

If you’re under FRA for the entire year: For every $2 you earn above the annual limit, $1 gets deducted from your benefits. The 2025 earnings limit sits at $23,400 (compared to $22,320 in 2024).

Example: Earning $24,000 means you’re $600 over the limit. Half of that excess ($300) gets deducted from your annual benefits. If you earned $28,400 instead, your annual payments would be reduced by $2,500.

The withholdings happen monthly rather than as a lump sum. So if you expected $900 in monthly benefits but earned $28,400 over the limit, your first three checks would be completely withheld ($2,700 total), with excess amounts refunded the following year.

If you reach full retirement age during the year: The calculation changes. Starting that specific month, $1 is deducted for only every $3 you earn over a higher limit. For 2025, this higher threshold is $62,160 (up from $59,520 in 2024). The important detail: only earnings up to the month before you reach FRA count—not your entire year’s income.

Example: You reach full retirement age in November 2025 with expected $900 monthly benefits. You’ll earn $65,160 from January through October. Since that’s $3,000 over the limit, your annual benefits drop by $1,000. Your January and February payments would be completely withheld ($1,800), but you’d receive your full benefit starting in March.

Recovering Excess Deductions After Reaching Full Retirement Age

Any excess withheld money comes back to you. If Social Security reduced your payments because you exceeded the earnings cap before reaching full retirement age, your benefit gets recalculated once you hit FRA. This recalculation credits you for months when payments were reduced or withheld, permanently increasing all future payments.

Spousal Benefits: Does Your Employment Status Matter?

You can still draw spousal Social Security benefits while working, assuming your spouse is also receiving benefits. However, the same earnings limits apply if you haven’t reached your full retirement age. Income above $23,400 (for 2025) may partially or fully withhold your spousal benefit until you reach FRA.

Additionally, if your spouse is drawing social security while working and hasn’t reached their own full retirement age, their earnings could trigger withholding of their payments. Since your spousal benefit is calculated as a percentage of their entitlement, any reduction to their benefit directly affects your spousal payment amount.

Planning Your Work and Benefits Strategy

Understanding these rules helps you make informed decisions about combining employment with social security. Before deciding to work while drawing benefits, calculate your estimated Social Security payment to see how work income might affect it. Many workers find that the temporary reduction in benefits while under full retirement age is offset by the increased lifetime payments they’ll receive from higher-earning years being factored into their record. Once you cross into your full retirement age, working has no negative impact whatsoever—you draw your full benefit regardless of employment earnings.