Working While Collecting Early Social Security? How Working Affects Your Benefits.

With more people claiming Social Security before full retirement age (FRA) -- typically around 67 -- it's no surprise that many remain in the workforce. Here's what you need to know about working while collecting Social Security.

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Working before you reach FRA

Let's say you're 62 and have decided to begin collecting Social Security benefits. At the same time, you're still working. According to Social Security Administration (SSA) rules, if you make more than the yearly earnings limit, your benefits will be reduced from your benefit payments by $1 for every $2 you earn above the annual limit of $24,480 (for 2026).

Example:

• You're collecting $2,000 in monthly Social Security benefits.
• You earn $34,480 for the year, and $10,000 over the earning limit.
• The SSA reduces your benefit by $1 for every $2 you're over the limit, meaning you receive $5,000 less in benefits ($10,000 ÷ $2 = $5,000).
• Instead of receiving $24,000 in Social Security benefits for the year, you receive a total of $19,000.

While it may sound like you're being punished for working, there's no reason to fear. That money is not permanently lost. When you reach FRA, your benefit will be recalculated to include any benefits withheld due to working before FRA, increasing the size of your monthly check.

Two important exceptions to this rule:

1. Different rules apply if you receive Social Security disability, Supplemental Security Income (SSI) payments, or work outside the U.S.
2. Spouses and survivors who receive Social Security benefits due to having minor children or children with disabilities in their care don't receive increased benefits at FRA if those benefits were reduced due to employment.

The year you reach FRA

Again, imagine that you began receiving Social Security benefits at age 62. However, it's the year you reach FRA, and your birthday is in June. Since it's the year you reach FRA, SSA will deduct $1 in benefits for every $3 you earn above $65,160.

For example, if your birthday is in June, you could earn up to $65,160 between January and May without money being withheld from your Social Security check. If you surpass $65,160 in the months leading up to your birthday month, the $1 deduction for every $3 earned kicks in.

However, starting in the month you reach FRA, you can earn as much as you'd like without any deductions to your Social Security benefits. Again, that money is not necessarily lost. The SSA recalculates your benefit when you achieve FRA, including any funds withheld due to working.

If you want or need to continue working, you can do so without having to worry about permanently losing Social Security.

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