For millions of Americans approaching or enjoying retirement, one of the most common questions is: can you collect Social Security and still work? As of October 2025, the rules are clear but nuanced. The Social Security Administration (SSA) allows individuals to receive benefits while continuing to work, but the impact on payments depends on age, earnings, and timing. With recent cost-of-living adjustments and updated earnings limits, understanding these rules is essential for effective retirement planning.
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Understanding Social Security and Work Eligibility
Social Security benefits are designed to provide income during retirement, but many Americans choose to keep working for financial security, personal fulfillment, or access to health insurance. The SSA permits beneficiaries to work while collecting benefits, but the effect on monthly payments varies based on whether the person has reached their Full Retirement Age (FRA).
- Full Retirement Age (FRA) depends on birth year. For those born in 1960 or later, FRA is 67.
- If you work before reaching FRA, benefits may be temporarily reduced depending on how much you earn.
- Once you reach FRA, there is no limit to how much you can earn—your Social Security benefits will not be reduced no matter how much you work.
Current Earnings Limits in 2025
The SSA updates earnings limits annually to reflect wage growth. In 2025, the key limits are:
| Category | Annual Earnings Limit | Reduction Rule |
|---|---|---|
| Below FRA (all year) | $22,320 | $1 withheld for every $2 above the limit |
| Reaching FRA in 2025 | $59,520 (up to month before FRA) | $1 withheld for every $3 above the limit |
| At or after FRA | No limit | No reduction in benefits |
If your earnings exceed the limit before reaching FRA, the SSA will withhold part of your benefits. However, these reductions are not permanent. Once you reach FRA, your benefit amount will be recalculated, and you’ll receive credit for months when benefits were withheld.
How Working Affects Your Social Security Benefits Before FRA
Suppose you start receiving benefits at age 62 and continue working. If your annual income exceeds the limit of $22,320, the SSA will withhold $1 for every $2 you earn above that threshold.
For example:
- If you earn $32,320, that’s $10,000 over the limit.
- The SSA will withhold $5,000 from your benefits for the year.
This withholding usually happens by reducing monthly benefit payments until the correct amount has been withheld. This can impact budgeting if you rely on Social Security as a steady source of income.
Special Rule for the Year You Retire
The SSA uses a special monthly rule during the first year you claim benefits. If you retire midyear and your earnings exceed the annual limit, you can still receive benefits for any month in which your earnings fall below a monthly threshold. This helps people who stop working partway through the year avoid losing an entire year’s worth of benefits due to earlier earnings.
Reaching Full Retirement Age Changes Everything
The most significant change happens when you reach Full Retirement Age. At that point:
- There’s no earnings limit, regardless of income level.
- Benefits are paid in full, even if you continue to work full-time.
- Previously withheld benefits are recalculated, often resulting in a higher monthly payment going forward.
This policy encourages older Americans to stay in the workforce without penalty, benefiting both individuals and the broader economy.
How Continuing to Work Can Increase Your Benefits
Beyond avoiding reductions, working while collecting Social Security can increase your benefit amount. Social Security is based on your highest 35 years of earnings. If your current income replaces a lower-earning year in your work history, your benefit will be recalculated upward.
This means that for some retirees, continuing to work into their late 60s can lead to larger monthly payments, even while collecting benefits.
Tax Implications to Consider
Another factor to consider is how working impacts taxes on Social Security benefits. In 2025, the thresholds remain unchanged:
- If you file as an individual and your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxable. Above $34,000, up to 85% may be taxable.
- For joint filers, the 50% threshold starts at $32,000, and the 85% threshold starts at $44,000.
Combined income includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits.
Continuing to work may increase your combined income and push you into a higher tax bracket, meaning you may owe more federal income tax on your benefits.
Why Many Americans Choose to Work While Collecting Benefits
Working while receiving Social Security benefits has become increasingly common, particularly among Baby Boomers and Gen Xers nearing retirement age. There are several reasons behind this trend:
- Rising Cost of Living: Even with cost-of-living adjustments, Social Security often covers only part of retirees’ expenses.
- Longer Life Expectancy: Many Americans plan for retirements lasting 20–30 years, prompting them to keep earning income longer.
- Access to Health Insurance: Some continue working to maintain employer-sponsored health coverage until Medicare eligibility.
- Personal Fulfillment: Many older adults find meaning and structure in their work, choosing to stay engaged professionally.
In 2025, the average monthly Social Security retirement benefit is $1,903, while the average COLA for 2025 is 3.2%, slightly lower than 2023’s historic increase. These figures underscore why supplemental income remains essential for many households.
Planning Ahead: Timing Matters
The decision to collect Social Security while working should be made strategically. Claiming benefits early (as early as age 62) results in permanently reduced payments, while waiting until FRA or beyond can significantly increase monthly benefits. Delaying benefits up to age 70 adds delayed retirement credits, boosting payments by up to 8% per year after FRA.
For those in good health with stable employment, delaying benefits while continuing to work can maximize lifetime income. For others, especially those needing immediate income, claiming early while working part-time may be the right fit.
Key Takeaways
- Yes, you can collect Social Security and still work, but earnings limits apply before FRA.
- In 2025, the earnings limit below FRA is $22,320, and the higher limit for the year of FRA is $59,520.
- After reaching FRA, there’s no limit on earnings, and benefits are not reduced.
- Working can increase your benefit amount if your new earnings replace lower years in your record.
- Taxes may apply to benefits depending on your total income.
- Timing your claim carefully can have a long-term impact on financial security in retirement.
Working while collecting Social Security has become a smart strategy for many Americans. Whether you’re easing into retirement or continuing full-time work, understanding the rules ensures you get the most from your benefits. Share your thoughts below — how are you planning your work and Social Security strategy?