Does It Really Make Sense To Work While On Social Security? It Depends on These 2 Factors
For today's workforce, retirement may look very different from that of previous generations.
Fifty-six percent of baby boomers expect to continue working into their 70s or never retire, according to a 2024 report from the Transamerica Center for Retirement Studies, and 82% of that group is doing so for financial reasons.
Taking Social Security while working can be a smart way to increase your monthly income and enjoy a more comfortable retirement. However, there are some limits on how much you can get in benefits if you are still working.
If you're considering working part-time or full-time after taking Social Security, here's how to decide if it's worth it.
The two most important factors in determining whether you should continue working after taking Social Security are your earnings and your age.
If you are below your full retirement age (FRA), your benefits may be withheld depending on how much you earn from your job. The FRA is 67 for everyone born in 1960 or later. If you were born before 1960, either FRA can be 66 years or 66 months.
Whether or not your benefits will be withheld (and how much of a discount you'll see) will depend on how much your income is above the retirement income test limit. This is an annual limit aimed specifically at people who work while on Social Security, and the higher your income, the greater the reduction.
There are two limits, depending on whether or not you will reach your FRA this year. In the months leading up to your FRA, you will be subject to a higher limit. But if you are below your FRA, your benefits may be significantly reduced.
|
|
Income Limit: 2024 |
Income Limit: 2025 |
Diminution of Profits |
|---|---|---|---|
|
If you the will reach your FRA this year |
$59,520 |
$62,160 |
$1 for every $3 over the limit |
|
If you I won't reach your FRA this year |
$22,320 |
$23,400 |
$1 for every $2 over the limit |
Source: Social Security Administration. Table by author.
Sometimes, these discounts can add up to hundreds of dollars a month. Depending on how much you collect from Social Security and what you earn from your job, the entire amount of your benefits may be withheld.
For example, say you're 62 years old with an FRA of 67, and you work part-time earning $25,000 a year. You are well under your FRA, so you will be under the $23,400 annual limit for 2025. Your income is $1,600 over that limit, resulting in a reduction of $800 a year, or about $67 a month.
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