How Working Affects Your Social Security Benefits
What happens to your Social Security when you work
If you claim Social Security before your full retirement age and earn income from work, Social Security will reduce your monthly benefit by $1 for every $2 you earn above an annual limit. The limit changes each year — in 2024 it is $23,400, but you should check the current year's figure on ssa.gov before you plan your income. This reduction only applies to the year you earn the money; once you reach full retirement age, your benefit goes back to the full amount, and there is no penalty for working.
The reduction stops the month you reach full retirement age. If you turn 67 in June, for example, Social Security counts only the income you earned from January through May when calculating the reduction. Starting in June, you receive your full benefit regardless of how much you earn.
If you have not yet claimed Social Security and you are still working, you can delay claiming and let your benefit grow. For each year you wait past full retirement age, your monthly payment increases by about 8 percent per year, up to age 70. This is one of the few ways to permanently increase your Social Security income.
Key Takeaways
- Social Security reduces your monthly benefit by $1 for every $2 you earn above the annual limit if you claim before full retirement age.
- The earnings limit is $23,400 in 2024, but changes yearly — confirm the current limit before you plan your work income.
- The reduction applies only to the calendar year you earn the money; once you reach full retirement age, you get your full benefit with no work penalty.
- Delaying your claim past full retirement age increases your monthly benefit by roughly 8 percent per year until age 70.
- If you work through SCSEP or another program, report all earnings to Social Security to avoid overpayment and future debt.
How to report your work income to Social Security
You must report your earnings to Social Security, even if you think the reduction will not affect you. Social Security uses your reported income to recalculate your benefit and send you the correct payment. If you do not report and Social Security finds out later, you will owe back the overpayment — the agency can recover it by reducing future checks or by other means.
You can report your earnings online at ssa.gov, by phone at 1-800-772-1213, or in person at your local Social Security office. Have your Social Security number and information about your employer ready. If you are self-employed, you will also need to report your net profit from your business.
Report your earnings as soon as you can after you earn them, rather than waiting until tax time. Social Security uses the information to adjust your benefit quickly, so you are not overpaid and then asked to repay months later.
When working through SCSEP affects your benefits
If you are working through the Senior Community Service Employment Program, your wages count as earned income for Social Security purposes. SCSEP pays you directly for the hours you work, and that income is subject to the same earnings limit as any other job. Report your SCSEP wages to Social Security along with any other work income you have.
Some people use SCSEP as a way to ease back into work after a long time out of the job market, or to build skills while their Social Security benefit is reduced. Because SCSEP is part-time and the wages are modest, many participants find the reduction manageable — but you should calculate what your actual benefit will be before you start, so there are no surprises.
If you have not claimed Social Security yet and you are working through SCSEP, you still have the option to delay your claim and let your benefit grow. Talk with a Social Security representative about whether delaying makes sense for your situation.
Understanding your full retirement age and benefit amount
Your full retirement age depends on the year you were born. If you were born between 1943 and 1954, your full retirement age is 66. If you were born between 1955 and 1959, it is between 66 and 67. If you were born in 1960 or later, your full retirement age is 67. You can find your exact full retirement age on ssa.gov or by calling Social Security.
Your benefit amount is based on your lifetime earnings record. The longer you worked and the more you earned, the higher your benefit will be. If you claim at full retirement age, you receive 100 percent of your calculated benefit. If you claim early (as early as 62), you receive a reduced percentage. If you delay past full retirement age, you receive an increased percentage.
Social Security sends you a statement each year showing your estimated benefit at different claiming ages. Review this statement to understand what you would receive if you claim now, at full retirement age, or at 70.
Deciding whether to work while receiving Social Security
The decision to work while receiving Social Security depends on your personal situation: how much you need the income, how much you earn, whether you have reached full retirement age, and whether you want to delay your claim to increase your future benefit.
If you have not reached full retirement age and your earnings will be high enough to trigger a reduction, calculate what your actual monthly benefit will be after the reduction. Sometimes the combination of your reduced benefit plus your work income is less than you would receive if you delayed your claim and did not work. A Social Security representative can help you run these numbers.
If you have reached full retirement age, there is no earnings limit — you can work as much as you want and receive your full Social Security benefit. This is often the best time to work if you need the income and have not yet claimed.
How to plan your income if you are working and receiving benefits
Start by finding out your full retirement age and your estimated benefit amount at different claiming ages. You can do this on ssa.gov or by calling 1-800-772-1213. Write down these numbers.
Next, estimate your work income for the year. If you are working through SCSEP, your program coordinator can tell you what you are likely to earn. Add any other income from jobs, self-employment, or rental property. Subtract the annual earnings limit ($23,400 in 2024, but confirm the current year). If the result is positive, multiply it by 0.5 to find out how much your Social Security benefit will be reduced.
Compare this scenario to what you would receive if you did not work and delayed your claim instead. Sometimes working now and accepting a reduced benefit costs you more in the long run than waiting. A Social Security representative can walk you through this comparison without pressure.
What to do if Social Security overpays you
If you do not report your earnings and Social Security overpays you, the agency will eventually discover the overpayment and ask you to repay it. You can request a waiver of the overpayment if you did not cause the error and repaying would be a hardship, but waivers are not automatic — you have to ask and provide proof of hardship.
The best approach is to report your earnings on time so the overpayment does not happen in the first place. If you do receive an overpayment notice, contact Social Security right away to discuss your options. Do not ignore the notice.
Frequently Asked Questions
Can I work and receive Social Security at the same time?
Yes. If you have reached full retirement age, you can work and receive your full benefit with no reduction. If you have not reached full retirement age, you can work, but your benefit will be reduced by $1 for every $2 you earn above the annual limit. Report your earnings to Social Security so your benefit is calculated correctly.
What counts as earned income for Social Security?
Wages from a job, including SCSEP wages, count as earned income. Self-employment income counts. Pensions, rental income, investment income, and interest do not count toward the earnings limit. Only work income matters for the reduction.
If I delay claiming Social Security, can I still work?
Yes. If you have not claimed Social Security yet, you can work as much as you want without any penalty to your future benefit. Your benefit will be higher when you do claim because you delayed, but working does not reduce that increase.
How do I know if delaying my claim is worth it?
Delaying increases your monthly benefit by roughly 8 percent per year until age 70. If you live a long time, the higher monthly payment will add up to more total money than claiming early. A Social Security representative can show you the break-even point — the age at which delayed claiming pays off for you personally.
What if I made a mistake and did not report some of my earnings?
Contact Social Security as soon as you realize the error and report the missing earnings. The sooner you report, the sooner Social Security can recalculate your benefit and correct any overpayment. Reporting the error yourself is better than waiting for Social Security to find it.