Can I still work if I'm claiming Social Security benefits?
Answered by
Ben Storey
Director, Retirement Thought Leadership, Bank of America
Yes, you can
collect Social Security benefits and work in retirement at the same time. But if you're working and collecting benefits before you've reached full retirement age — which is between ages 66 and 67, depending on the year of your birth — your monthly benefits may be subject to a reduction if your income exceeds a prescribed limit.
However, when you reach full retirement age, your benefit will be adjusted to give you credit for the withholding that took place due to excess earnings. For more, see the
Social Security Administration page on the subject. After you reach full retirement age, your benefits also will no longer be subject to any reduction while you're employed, and there is no limit on how much you can earn.
Here's how to calculate how your earnings impact your Social Security benefits:
- If you're under your full retirement age for the entire year, the government deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2021, that limit is $18,960.
- In the year you reach full retirement age, the government deducts $1 in benefits for every $3 you earn above a different limit. In 2021, the limit on your earnings is $50,520 but the government only counts earnings before the month you reach your full retirement age.
- Beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.
Earnings limits |
| Age |
2021 income limit |
Monthly benefit reduction |
| Under Full Retirement Age |
$18,960 |
$1 of benefits for every
$2 earned above limit |
| Months of year before reaching Full Retirement Age |
$50,520 |
$1 of benefits for every
$3 earned above limit |
| Month of reaching Full Retirement Age & beyond |
Unlimited |
None |
| Source: Social Security Administration Publication EN-05-10069 How Work Affects Your Benefits, January 2021. |
Keep in mind that the amount by which your Social Security benefit is reduced depends on the type of earnings you have. If you're self-employed, the government counts only your net earnings from that work. If you work for an employer, only your wages are included in Social Security calculations. Pensions, annuities, investment income and other government benefits do not count as earnings while you work in retirement.
Will my Social Security benefits be taxed differently if I work?
Working while collecting Social Security can affect your taxable income. Taxes on Social Security retirement benefits are based on what is commonly referred to as your combined income, a figure the IRS calculates by adding up your adjusted gross income, any tax-free interest you may have earned, and 50% of your Social Security benefits, plus certain other adjustments for the year. There are strategies that can
help you minimize taxes on your Social Security benefits, although, these too can change based on your age.
Calculating your combined income