Once you retire and start drawing Social Security, the SSA considers that you are a retiree. However, one may continue to work after retiring, which is likely to alter the amount of one’s benefit check. If earnings exceed certain amounts, benefits may be deducted. Learn about income limits, deductions, and working here:
Income Limits
The SSA has set income limits for each year to determine whether your earnings will affect benefits. These limits depend on your age and proximity to full retirement age (FRA). There are two important limits in 2025:
- $23,400 if you are younger than full retirement age. Earning more than this limit will result in a $1 reduction for every $2 earned.
- $62,160 the year you reach full retirement age. Earnings above this limit are reduced by $1 for every $3 earned. This rule only applies to earnings before your FRA, not to earnings for the full year.
- After full retirement age: Once you reach your FRA, there are no limits on your earnings, and benefits are not affected.
Deductions
Earnings above the earnings limit reduce your benefits. Here’s how:
- Before full retirement age: If you have earnings of more than $23,400 in 2025, you’ll be reduced by $1 for every $2 earned above the limit.
- In the year of full retirement age: During the months leading up to your FRA, you’ll be reduced by $1 for every $3 earned above the $62,160 limit.
- After full retirement age: No limits or reductions apply to earnings.
- Important: These deductions are not permanent. The SSA recalculates your benefits each year and may increase your benefits retroactively to account for the months in which reductions were made.
Earnings Record
After you reach full retirement age, even though there is no limit on your earnings, you must still report your earnings. The SSA periodically reviews your earnings record and may revise the benefit amount to account for your additional earnings. Any retroactive adjustments are applied beginning in January of the following year.
Earnings Test Calculator
The SSA provides an Earnings Test Calculator on its website that helps you estimate potential reductions based on your age, income, and FRA. This tool is extremely useful for planning.
Example
| Scenario | Earnings | Limit | Excess Earnings | Reduction |
|---|---|---|---|---|
| Younger than FRA (2025) | $30,000 | $23,400 | $6,600 | $3,300 ($1 deducted for every $2) |
| Reaches FRA in 2025 (before FRA) | $65,000 | $62,160 | $2,840 | $946 ($1 deducted for every $3) |
Key Takeaways
- If you are past FRA and earning more than the earnings limit, your benefits may be reduced.
- After you reach full retirement age, your income will not be affected.
- Benefits that have been cut can be added back after the SSA recalculates them each year.
- The SSA’s Earnings Test Calculator is helpful in planning.
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FAQs
What are the earnings limits for 2025?
$23,400 before full retirement age.
Does earning more than the limit permanently reduce benefits?
No, the reductions are temporary and are added back later.
How much can you earn after full retirement age?
There is no limit on earnings after FRA.
What is the reduction rate for younger workers?
$1 reduction for every $2 of earnings above the income limit.
How does the SSA recalculate benefits?
Benefits are recalculated to account for the months that were cut.