Originally published July 2015. Last updated March 2026.
If you work and collect Social Security at the same time, your benefits might be temporarily reduced. Here’s how the earnings test works and when it stops applying.
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What Counts as Earnings
Only wages, salary, and self-employment income count toward Social Security’s earnings limit. These don’t count:
- Investment income, dividends, capital gains
- Pensions and annuities
- IRA/401(k) withdrawals
- Rental income
- Government benefits
The Earnings Limit by Age
Under full retirement age (67 for most): In 2025, you can earn up to $23,400 before Social Security withholds benefits. Above that, $1 is withheld for every $2 you earn over the limit.
Year you reach full retirement age: The limit jumps to $62,160, and the withholding rate drops to $1 for every $3 over the limit. Only earnings before the month you reach FRA count.
At full retirement age and beyond: No earnings limit. Earn as much as you want with no impact on benefits.
Withheld Benefits Aren’t Lost
This is the part most people miss. When you reach full retirement age, Social Security recalculates your benefit to credit you for the months when benefits were withheld. Your monthly check goes up to compensate. It’s not a permanent reduction.
When Early Claiming Still Makes Sense
If you’ve stopped working and need income, claiming early (as early as 62) provides cash flow. Just know the benefit is permanently reduced by about 30% compared to waiting until 67, and about 46% compared to waiting until 70.
If you’re still working full-time with high earnings, claiming early usually doesn’t make sense. The earnings test will withhold most of your benefit anyway, and you’d lock in a lower monthly amount.
FAQ
Does the earnings test apply to my spouse’s benefits?
Each spouse’s earnings are tested independently. Your work income doesn’t affect your spouse’s Social Security, and vice versa.
What if I change my mind about claiming early?
Within 12 months of your first payment, you can withdraw your application and repay all benefits received. After that, you can suspend benefits at full retirement age to earn delayed retirement credits (8%/year until 70).
Schedule a free 20-minute consultation to plan your Social Security strategy.
R.L. Brown Wealth Management
106 W Vine St, Suite 300, Lexington, KY 40507
859.317.5889
