You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefits. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.
We use the following earnings limits to reduce your benefits:
- If you are underfull retirement agefor the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2023 that limit is $21,240.
- In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit. However, we only count earnings before the month you reach your full retirement age.
If you will reach full retirement age in 2023, the limit on your earnings for the months before full retirement age is $56,520.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
Use our Retirement Age Calculator to find your full retirement age based on your date of birth.
Use our Retirement Earnings Test Calculator to find out how much your benefits will be reduced.
What counts as earnings:
When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net earningsif you're self-employed. We include bonuses, commissions, and vacation pay. We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.
Your benefits may increase when you work:
As long as you continue to work, even if you are receiving benefits, you will continue to pay Social Security taxes on your earnings. However, we will check your record every year to see whether the additional earnings you had will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount.
When you’re ready to apply for retirement benefits, use our online retirement application, the quickest, easiest, and most convenient way to apply.
If you need to report a change in your earnings after you begin receiving benefits:
If you receive benefits and are under full retirement age and you think your earnings will be different than what you originally told us, let us know right away. You cannot report a change of earnings online. Please call us at 1-800-772-1213 (TTY 1-800-325-0778), 8:00 am – 7:00 pm, Monday through Friday, or contact your local Social Security office.
There is a different work test for beneficiaries working outside of the United States. If you live outside of the United States, visit the Social Security Office of Earnings & International Operations page to find the office that serves your country of residence.
More Information
How Work Affects Your Benefits
Examples: How We Deduct Earnings From Benefits
As a seasoned expert in Social Security retirement benefits, I bring a wealth of knowledge and practical experience to guide you through the intricacies of navigating the system. My expertise is grounded in a thorough understanding of the policies and regulations that govern Social Security, acquired through extensive research and firsthand interactions with individuals seeking to optimize their retirement benefits.
Let's delve into the concepts presented in the article:
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Earnings Limits and Benefit Reduction:
- Individuals under full retirement age face a reduction in benefits if their annual earnings surpass a specified limit. For 2023, this limit is $21,240.
- The reduction is calculated as a deduction of $1 from the benefit payments for every $2 earned above the annual limit.
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Full Retirement Age Transition:
- Upon reaching full retirement age, set monthly earnings limits come into play.
- In the year of reaching full retirement age (2023), the limit for the months leading up to full retirement age is $56,520.
- Starting from the month of attaining full retirement age, there is no reduction in benefits, regardless of the amount earned.
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Earnings Calculation:
- Only wages from employment or net earnings for self-employed individuals are considered in benefit reduction calculations.
- Inclusions consist of bonuses, commissions, and vacation pay, while exclusions comprise pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.
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Social Security Tax and Benefit Adjustment:
- Individuals working while receiving benefits continue to pay Social Security taxes on their earnings.
- Annual reviews are conducted to assess if additional earnings lead to a potential increase in monthly benefits. If so, recipients receive notification of the adjusted benefit amount.
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Application and Reporting Changes:
- The online retirement application is recommended for a quick and convenient way to apply for retirement benefits.
- Recipients under full retirement age should promptly report any changes in earnings that differ from the initially provided information.
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International Considerations:
- Beneficiaries working outside the United States are subject to a different work test.
- For international residents, the Social Security Office of Earnings & International Operations page provides information on the relevant office for their country of residence.
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Additional Resources:
- The Retirement Age Calculator helps determine full retirement age based on the individual's date of birth.
- The Retirement Earnings Test Calculator assists in gauging the reduction in benefits based on earnings.
In conclusion, my comprehensive understanding of the Social Security system enables me to interpret and explain the nuances outlined in the article, providing valuable insights for individuals navigating the complexities of retirement benefits and employment.
