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Claiming Social Security Benefits While Working: Understanding the Earnings Limit

Updated: Dec 15, 2023

women looking over information on social security benefits while working

Claiming Social Security benefits while continuing to work requires careful consideration to maximize your retirement income. In this blog, we'll explore the impact of employment on your Social Security benefits and shed light on the earnings limit for Social Security, helping you make informed decisions about your retirement journey.

How Working Impacts Your Social Security Benefits

If you decide to start collecting Social Security benefits before reaching your full retirement age (FRA) in 2023 and earn more than the yearly earnings limit, your benefits will be reduced. Specifically, your benefits will be reduced by $1 for every $2 earned above the limit. Once you reach your FRA, the reduction changes to $1 for every $3 earned above the annual limit.

Understanding Your Full Retirement Age (FRA)

Your FRA is determined by the year you were born. For example:

  • People born between 1943 and 1954 reach their FRA at 66.

  • People born in 1955 reach their FRA at 66 and two months.

  • People born in 1956 reach their FRA at 66 and four months.

Earnings Limit for Social Security Benefits

In 2023, the earnings limit for individuals below their FRA is $21,240 per year ($1,770 monthly). For those who will reach their FRA in 2023, the limit is $56,520 ($4,710 monthly) for the months leading up to their birthday. It's important to note that the earnings limits only apply to income from employment, not investments or pensions. Once you reach your FRA, there is no earnings limit.

Exploring the One-Time Social Security Do-Over

In unforeseen circumstances where your financial situation or retirement plans change, you can withdraw your Social Security application within the first year of receiving benefits. However, keep in mind that if you choose this one-time withdrawal, you'll need to repay the benefits you have already received, including any withheld amounts for Medicare premiums and taxes.

Planning for a Secure Retirement

Navigating the complexities of Social Security benefits and employment requires thoughtful planning. If you have questions or would like to discuss your options, let's connect. Schedule a 30-minute call to ensure your retirement plan aligns with your goals.

Click the link to schedule a call:

By understanding the impact of working while receiving Social Security benefits and being aware of the earnings limit, you can make informed decisions to optimize your retirement income. Let us guide you on your journey to a secure and fulfilling retirement.

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