Learn About Working While Receiving Social Security

Understanding Social Security and Work Earnings

Social Security provides monthly payments to millions of Americans who are retired, disabled, or survivors of deceased workers. Many people wonder whether they can work while receiving these payments. The answer is yes, but there are specific rules about how much you can earn before your benefits are affected.

When you receive Social Security retirement benefits, your payments may be reduced if your earnings exceed certain thresholds. This happens only until you reach your full retirement age. After you reach full retirement age, you can earn any amount without losing benefits. The Social Security Administration (SSA) tracks earnings to determine if reductions apply to your monthly payments.

For people receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), work rules are different. These programs include a trial work period and extended work incentives that allow you to test your ability to work without immediately losing your benefits. Understanding these differences is crucial before you start working.

The earnings limits change each year. In 2024, if you are under full retirement age for the entire year, the limit is $23,400. For each $2 in earnings over this amount, Social Security withholds $1 in benefits. During the year you reach full retirement age, different limits apply. Once you reach full retirement age, the earnings limit no longer applies.

Takeaway: Before starting work, determine your current age and full retirement age. Look up the current earnings limits on the Social Security website or contact the SSA directly to understand which rules apply to your situation.

Earnings Limits for Retirees Under Full Retirement Age

If you are receiving Social Security retirement benefits and have not yet reached your full retirement age, earnings limits directly affect your monthly payments. The SSA counts earned income from wages and self-employment, but does not count investment income, pensions, or other unearned sources. This distinction matters because only work earnings trigger benefit reductions.

The annual earnings limit for 2024 is $23,400 if you are under full retirement age for the entire year. For every $2 you earn above this amount, Social Security reduces your benefits by $1. For example, if you earn $25,400 and the limit is $23,400, you have $2,000 in excess earnings. Social Security would withhold $1,000 in benefits that year, spread across your monthly payments.

Earnings include wages from employment and net income from self-employment. Wages include salary, bonuses, commissions, and certain other forms of compensation. If you are self-employed, only net earnings count—you subtract business expenses from gross income. You report annual earnings on your tax return, and Social Security uses those figures to calculate any benefit reductions.

The month you reach full retirement age is treated differently. In the months before you reach full retirement age, a higher earnings limit applies. In 2024, this limit is $62,160 for the months before you reach full retirement age. However, only earnings from months before your birthday count toward this limit. Once your birthday arrives and you reach full retirement age, no earnings limit applies for the remainder of that year or any future year.

Many people do not realize that excess earnings result in benefit reductions, not penalties or debt. If Social Security withholds benefits because you earned too much, you do not have to repay that money later. The withheld amount simply reduces your payments for that year. When you turn full retirement age, your benefits are recalculated, and you may receive higher monthly payments because you worked.

Takeaway: Track your work income carefully during the year. If you think you might exceed the earnings limit, contact Social Security before the year ends to discuss potential benefit reductions. This helps you plan your household budget more effectively.

Working After You Reach Full Retirement Age

Once you reach your full retirement age, earnings limits no longer apply. You can work and earn any amount without losing a single dollar of Social Security benefits. This is a significant change from the years before reaching full retirement age. Full retirement age depends on your birth year and ranges from age 66 to 67 for people born between 1943 and 1960, with slightly older ages for those born after 1960.

Reaching full retirement age is important for another reason: your benefit amount increases. If you were born in 1943 or later and you delay claiming benefits past full retirement age, your monthly payment increases by about 8% for each year you wait, up to age 70. This means working longer and delaying benefits can result in significantly higher monthly payments for the rest of your life.

Some people delay claiming Social Security specifically so they can work longer. This strategy makes sense for people in good health with family histories of longevity. By working into your late 60s or early 70s, you can increase your lifetime Social Security income. If you were born after 1943, every year you delay past full retirement age increases your benefits until age 70.

Working after full retirement age also increases your lifetime earnings record, which may increase your benefit amount. Social Security calculates your primary insurance amount based on your 35 highest-earning years. If you work in years when your previous earnings were very low or zero, new work income may replace those low-earning years and increase your overall benefit.

There are also tax considerations when working while receiving Social Security. Some of your benefits may be subject to income tax if your combined income (adjusted gross income plus nontaxable interest plus half of Social Security benefits) exceeds certain amounts. These thresholds are $25,000 for single filers and $32,000 for married couples filing jointly. Between 50% and 85% of your benefits may be taxable income depending on how much your combined income exceeds the threshold.

Takeaway: Once you reach full retirement age, you have complete freedom to work without benefit reductions. Consider how continued work affects your total lifetime benefits and your tax situation. A tax professional can help you understand the tax implications of your specific situation.

Work Incentives for Social Security Disability Insurance Recipients

Social Security Disability Insurance (SSDI) provides monthly benefits to people under full retirement age who have a severe medical condition expected to last at least 12 months or result in death. Unlike retirees, people receiving SSDI have access to special work incentives designed to encourage employment while protecting their benefits. These work incentives exist because Social Security recognizes that people with disabilities may be able to work part-time or in limited capacity roles.

The trial work period is the most important work incentive for SSDI beneficiaries. During a nine-month trial work period, you can earn any amount without losing your benefits. The SSA counts any month in which you earn $1,050 or more as a work month (these dollar amounts change yearly). You do not have to use the nine months consecutively; the months count once they occur. During and immediately after the trial work period, you receive your full SSDI payment regardless of earnings.

After your trial work period ends, you enter the extended eligibility period. For 36 months following the end of your trial work period, you can continue working and receive benefits for any month in which your earnings fall below the substantial gainful activity (SGA) level. For 2024, SGA is $1,550 per month for non-blind individuals and $2,590 for blind individuals. This extended period allows you to gradually test whether you can sustain work without immediately losing all benefits.

The impairment related work expense (IRWE) deduction allows you to exclude certain work-related expenses from your earnings when calculating benefit amounts. If your disability requires you to spend money on items or services that help you work—such as specialized equipment, personal attendants, transportation, or medical devices—you may deduct these costs. For example, if you earn $2,000 but have $400 in disability-related work expenses, only $1,600 counts toward your benefit calculation.

The plan to achieve self-support (PASS) program is another significant work incentive. A PASS allows you to set aside income and resources for a specific occupational goal without affecting your Supplemental Security Income (SSI) payments. You might use PASS to save money for education, equipment, or business start-up costs. This program requires you to develop a formal plan with SSA, but it can be extremely valuable for people working toward vocational goals.

Additionally, the Ticket to Work program allows SSDI and SSI beneficiaries to work with employment service providers, voc