For millions of Americans relying on Social Security benefits, continuing to work after retirement can be both a financial and personal decision. But working while collecting benefits may impact how much you receive—especially if you haven’t yet reached your full retirement age (FRA).
Understanding the Social Security Administration’s (SSA) earnings rules is crucial to avoid any unexpected reductions in your monthly payments.
What Are the Work and Earnings Limits in 2025?
In 2025, the SSA has set two key earnings thresholds that determine whether your Social Security benefits will be reduced:
- If You Are Under Full Retirement Age (FRA) All Year
- Earnings limit: $23,400
- Reduction: $1 is deducted from your benefits for every $2 you earn over the limit.
- If You Will Reach FRA in 2025
- Earnings limit before your birthday month: $62,160
- Reduction: $1 is deducted for every $3 earned above this amount—but only for the months prior to reaching FRA
- After You Reach Full Retirement Age
- There is no earnings limit. You can earn as much as you like without affecting your Social Security benefits.
These rules apply to both salaried and hourly wage earners, although self-employed individuals have slightly different criteria based on service hours.
How Many Hours Can You Work Without Affecting Benefits?
The actual number of hours you can work depends on your wage. For example:
- If you earn $20/hour, working about 1,170 hours a year (or around 22.5 hours/week) will keep you within the $23,400 limit.
- If you earn $30/hour, you can only work about 780 hours/year (or roughly 15 hours/week) before your benefits start getting reduced.
Keep in mind, exceeding the earnings limit doesn’t mean your benefits are gone forever. The SSA adjusts your benefit amount later in life to account for the months when you didn’t receive full payments.
“If your benefits are reduced because you earned too much, the SSA will recalculate your benefit amount when you reach full retirement age,” notes the Social Security Administration.
What Counts Toward the Earnings Limit?
Only earned income is counted, such as wages from a job or net self-employment income. The following sources of income do not count:
- Pensions
- Annuities
- Investment income (stocks, bonds)
- IRA distributions
- Rental income
This distinction is especially important for retirees who have diversified income sources.
What If You’re Self-Employed?
For those who are self-employed, the SSA not only considers your income but also the number of hours you work. According to the SSA guidelines, if you:
- Work more than 45 hours a month, or
- Work between 15–45 hours in a highly skilled occupation
…your benefits may be affected, even if your net income remains low. The SSA uses these measures to determine whether you are performing “substantial services.”
What Happens If You Exceed the Earnings Limit?
If you earn over the limit, the SSA will automatically deduct the appropriate amount from your benefits. However, once you reach your FRA, you will start receiving your full monthly benefit again—plus adjustments to compensate for any earlier deductions.
This means that while your benefits may be temporarily reduced, the long-term impact is generally neutral if you live to average life expectancy.
Tips for Managing Work and Social Security Benefits
- Plan strategically: If you’re nearing FRA, it may make sense to reduce working hours or defer work-related bonuses until after you hit that milestone.
- Track your earnings carefully: Especially if you’re close to the limit.
- Report changes: Always inform the SSA about changes in your work status or income. You can do so at ssa.gov.
This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.
