As of January 2025, the average monthly Social Security benefit was $1,976. That amounts to a little under $24,000 per year, which isn’t a ton of money to live on.
That’s why it’s not a bad idea at all to work at the same time you’re collecting Social Security. Living on those benefits alone can be extremely tough, but a part-time job could provide you with the supplemental income you need to be more comfortable.
Image source: Getty Images.
Plus, working can have non-financial benefits. Holding down a job could help give you a sense of purpose and a reason to leave the house in the morning. Work could also serve as a social outlet — another important thing at a time when you may be feeling more isolated.
But if you’re going to work while receiving Social Security, it’s important that you know the rules. Here are three important things to be aware of.
1. Once you’ve reached full retirement age, your earnings can’t hurt you
Full retirement age is when you’re eligible for your complete monthly Social Security benefit based on your personal wage history. If you were born in 1960 or later, full retirement age is 67.
Once full retirement age arrives, you can earn any amount of money from a job without it having a negative impact on your Social Security payments each month. This isn’t to say that your earnings won’t affect your benefits, though.
In some cases, a part-time job in retirement could actually boost your benefits down the line if you have gaps in your work history. But there’s no negative impact to your benefits if you’re working and are already at your full retirement age.
2. Your age matters in the context of Social Security’s earnings-test limit
If you work and collect Social Security before getting to full retirement age, you’ll be subject to an earnings-test limit. And exceeding it generally means having benefits withheld. But you should know that the earnings-test limit changes from year to year, and it’s also based on your age.
If you’re under full retirement age and won’t be reaching it this year, the earnings-test limit is $23,400. If you haven’t yet reached full retirement age but will get to that point before the calendar year is up, the earnings-test limit for you in 2025 is $62,160.
3. Withheld benefits for exceeding the earnings-test limit aren’t lost forever
Exceeding the earnings-test limit could result in having $1 in Social Security withheld per $2 or $3 of earnings, depending on your age. But you should know that those withheld benefits aren’t lost forever.
Once you reach full retirement age, your benefits will start to increase to make up for the money that was withheld earlier. However, do remember that claiming Social Security before full retirement age generally results in permanently reduced benefits. And taking that financial hit may not make sense if you’re earning enough to result in withheld benefits.
For example, say you’re entitled to $2,000 a month in Social Security at age 67, but you sign up at age 62 instead. That reduces your monthly benefit to $1,400. But if your earnings will cause you to lose half of that $1,400, it may not be worth it to give up the $600 extra a month you could’ve had by waiting until full retirement age to take benefits in the first place.
All told, the rules of working while collecting Social Security can be a little complex. So if that’s an arrangement you’re interested in, make sure to read up on them so there are no misunderstandings.
