What happens if I work and get Social Security retirement benefits? (2024)

FAQs

What happens if I work and get Social Security retirement benefits? ›

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.

How We Deduct Earnings From Benefits. In 2024, if you're under full retirement age, the annual earnings limit is $22,320. If you will reach full retirement age in 2024, the limit on your earnings for the months before full retirement age is $59,520.

If you're eligible for Social Security, you can start collecting your benefits as early as age 62, and you can also continue to work.

SSI is generally for individuals who don't earn more than $1,971 from work each month.

There is a special rule that applies to earnings for 1 year, usually the first year of retirement. Under this rule, you can get a full Social Security benefit for any whole month you are retired and earnings are below the monthly limit.

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.

Starting in the month you hit your full retirement age, there is no longer an earnings limit. Your benefits will no longer be reduced regardless of how much income you have. The earnings limit specifically applies to earnings from wages or self-employment.

You can get Social Security retirement or survivors benefits and work at the same time. But, if you're younger than full retirement age, and earn more than certain amounts, your benefits will be reduced.

THE INCOME TAX IMPLICATIONS

Regardless of your income level, no more than 85% of your Social Security benefits will ever be subject to federal taxation. Note that California does not currently tax Social Security benefits, although 13 other states do.

There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.

What happens if you have more than $2000 in the bank on SSI? ›

If you are on SSI (not SSDI) then you will lose your supplemental income for any months that you have $2,000 for the whole month (If it tops $2,000 during the month but then you use some and it doesn't stay over that, then you are not penalized).

Not working long enough is the most obvious reason someone wouldn't be eligible for Social Security retirement benefits. You must have a work history of at least 10 years to earn the credits you need to be eligible for Social Security as a retiree.

Social Security does not count pension payments, annuities, or the interest or dividends from your savings and investments as earnings. They do not lower your Social Security retirement benefits. See What Income Is Included in Your Social Security Record for more information.

Special Rule for the Year You Reach Full Retirement Age

But for every $3 you earn over that amount in any month before you turn 67, you'll lose $1 in Social Security benefits. Beginning in the month you reach full retirement age, you become eligible to earn any amount without penalty.

You can earn any amount and not be affected by the Social Security earnings test once you reach full retirement age, or FRA. That's 66 and 6 months if you were born in 1957, 66 and 8 months for people born in 1958, and gradually increasing to 67 for people born in 1960 and later.

If you are full retirement age and earning money, no worries. You're good to go, no penalties involved. However, if you are younger than full retirement age and make more than the yearly earnings limit, which for 2024 is $22,320, the Social Security Administration (SSA) reduces your benefit.

The point is that if you earned $120,000 per year for the past 35 years, thanks to the annual maximum taxable wage limits, the maximum Social Security benefit you could get at full retirement age is $2,687.

The Social Security five-year rule is the time period in which you can file for an expedited reinstatement after your Social Security disability benefits have been terminated completely due to work.