How does working full-time affect your Social Security benefits? Here's what happens

How Working Full-Time Affects Your Social Security Benefits

Social Security plays a crucial role in retirement planning, offering a financial safety net for millions of Americans. But what happens when you decide to work full-time while receiving Social Security benefits? The answer depends on several factors, including your age, income level, and the type of benefits you’re receiving. Understanding how full-time work impacts your Social Security benefits is essential to avoid surprises and make informed financial decisions.

1. The Basics of Social Security Benefits
Social Security benefits are primarily available to retirees, disabled individuals, and survivors of deceased workers. The amount you receive depends on your earnings history and the age at which you begin collecting benefits. While the full retirement age (FRA) is currently between 66 and 67 (depending on your birth year), you can start receiving reduced benefits as early as age 62. However, the earlier you claim, the lower your monthly payments will be.

2. Working Before Full Retirement Age
If you’re working full-time and haven’t yet reached your full retirement age, the Social Security Administration (SSA) may temporarily reduce your benefits based on how much you earn. This is known as the earnings test.

In 2025, if you are under your FRA for the entire year, the SSA will deduct $1 from your benefits for every $2 you earn above the annual limit, which is $22,320. For example, if you earn $32,320, that’s $10,000 over the limit, and the SSA will withhold $5,000 in benefits.

If you reach your FRA in 2025, a higher limit applies—$59,520. In this case, the SSA will deduct $1 for every $3 earned above that limit, but only for the months prior to reaching FRA.

3. What Happens at Full Retirement Age
The good news is that once you reach your full retirement age, there is no earnings limit. You can work full-time and earn any amount without affecting your Social Security benefits. Not only will your monthly checks continue in full, but your earnings might even increase your future benefit amount if your current income is higher than any of your previous 35 highest-earning years.

4. Impact on Taxes
Even though your benefits are not reduced once you reach full retirement age, working full-time could still affect how your benefits are taxed. The IRS may tax a portion of your Social Security benefits depending on your combined income, which includes your adjusted gross income (AGI), non-taxable interest, and half of your Social Security benefits.

If you're single and your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxable.

If it’s over $34,000, up to 85% of your benefits may be taxable.

For married couples filing jointly, those thresholds are $32,000 and $44,000, respectively.

5. Delaying Benefits Can Pay Off
If you haven’t yet started collecting Social Security, you might consider delaying your benefits while you work full-time. For each year you delay past your full retirement age (up to age 70), your benefit amount increases by about 8%. This delay can result in significantly larger checks later in life, which can be helpful if you expect to live a long time or want to provide more for a surviving spouse.

6. Social Security Disability and Full-Time Work
If you're receiving Social Security Disability Insurance (SSDI), working full-time can have different implications. SSDI is designed for people who can’t engage in substantial gainful activity due to a medical condition. In 2025, the monthly income limit is $1,550 ($2,590 if you're blind). Exceeding this could disqualify you from SSDI benefits, though the SSA does offer trial work periods for those trying to return to the workforce.

7. Survivor and Spousal Benefits
If you're receiving spousal or survivor benefits and work full-time before reaching your FRA, your benefits may be reduced based on the same earnings test mentioned earlier. Once you reach full retirement age, you can earn as much as you want without affecting these benefits.

8. Planning Strategies
To maximize your Social Security benefits while working full-time, consider the following strategies:

Wait to claim benefits until full retirement age or later, especially if your income would trigger benefit reductions.

Track your earnings annually to make sure the SSA has an accurate record of your income.

Consult a financial advisor to evaluate how work income, taxes, and benefit timing interact with your overall retirement goals.

Conclusion

Working full-time while receiving Social Security benefits can impact the amount you receive, especially if you claim benefits before your full retirement age. While benefits may be temporarily reduced due to the earnings test, they are not lost forever. Once you hit your FRA, your benefits can be recalculated to reflect any withheld payments—and after that, you can work without restrictions. By understanding the rules and planning accordingly, you can make the most of your income and your Social Security benefits.