Picking up a part-time job in retirement is a simple way to boost your lifestyle. However, depending on your age and income, your earnings could affect your Social Security benefits. If you start a new job after you begin receiving benefits, the payments you’re eligible for could change. Here’s what to know before starting a retirement job:
— Consider your Social Security full retirement age.
— Understand how your earnings affect Social Security.
— Know that the Social Security earnings limit changes the year you reach full retirement age.
— Remember that Social Security payments are only withheld temporarily if you exceed the earnings limit.
— Be aware that working can make your Social Security benefit taxable.
— Keep in mind the rules for working while collecting Social Security benefits.
Consider Your Social Security Full Retirement Age
Once you reach full retirement age
, there is no limit on how much you can earn while collecting Social Security payments. Your full retirement age is based on the year you were born. The full retirement age for anyone born between 1943 and 1954 is 66 years old. The number increases by months for those born between 1955 and 1959. Individuals born in 1960 or later have a full retirement age of 67.
“Your full retirement age is one of those critical dates in retirement that you need to know, especially when it comes to Social Security,” said Andrew Wood, a retirement planning advisor with Dan White & Associates in Middletown, Delaware, in an email.
If you work while receiving benefits before your full retirement age, “you could be impacted by the earnings test, which could reduce or even eliminate the checks you’re planning to receive,” Wood said.
[Read: What Is the Average Retirement Age in the U.S.?]
Your Earnings While Receiving Social Security
If you choose to work while receiving Social Security before your full retirement age, you will only be able to receive a certain income level before your Social Security benefit is temporarily reduced. The Social Security earnings limit is $24,480 per year in 2026 for someone who has not reached full retirement age. If you earn more than this amount, the Social Security Administration will withhold $1 in benefits for every $2 earned above the limit.
For example, if you earn $26,400 in 2026 while receiving Social Security, that’s $1,920 over the limit. The Social Security Administration will withhold $960 in benefits for the year.
They typically do this by withholding one full monthly check (or part of one), rather than reducing every payment. After that, you’ll receive your full monthly benefit for the rest of the year, assuming you’re below full retirement age the entire year.
[Read: 5 Reasons to Take Social Security at Age 62]
The Social Security Earnings Limit Changes the Year You Reach Full Retirement Age
There’s a different Social Security earnings limit for those reaching full retirement age in 2026, and the penalty is lower for earning too much. If you reach full retirement age in 2026, the earnings limit for the months before your birthday is $65,160. If you earn more than this amount, the Social Security Administration will withhold $1 in benefits for every $3 in excess earnings.
For example, if you will reach your full retirement age in 2026 and you receive $2,500 a month from Social Security while earning $72,000 from a job during the year, you would be $6,840 over the limit. As a result, $2,280 in benefits would be withheld for the year.
Social Security Payments Are Only Withheld Temporarily
If you work while receiving Social Security benefits before reaching full retirement age and see a change in benefits, the adjustment is only temporary. “This is not a permanent reduction,” said Kris Jerke, president of Ascend Financial in Sioux Falls, South Dakota, in an email. “You will receive credit for reduced benefits once you reach full retirement age.”
You could receive larger Social Security payments later that reflect your continued earnings. “This is a great payout to consider if you are still healthy and able to work during the early retirement years,” said Jared Weitz, CEO of United Capital Source in Garden City, New York, in an email.
[Read: What Is a Good Monthly Income in Retirement?]
Working Can Make Your Social Security Benefit Taxable
If you are receiving Social Security benefits, income from work, withdrawals from traditional IRAs or 401(k)s, and interest or dividends can increase your “combined income,” which the Internal Revenue Service uses to determine whether a portion of your benefits is taxable.
If the sum of your adjusted gross income, nontaxable interest and half your Social Security benefit is higher than $25,000 as an individual and $32,000 as a married couple, up to 50% of your Social Security benefits may be taxable. If these income sources are greater than $34,000 ($44,000 for couples), up to 85% of your Social Security benefit may be taxable. The Internal Revenue Service also provides a higher standard deduction for taxpayers age 65 and older, which can help reduce overall taxable income and may offset some of the tax impact on Social Security benefits.
Working While Collecting Social Security Benefits
You can work and collect Social Security benefits simultaneously. However, if you are younger than your full retirement age, part of your Social Security payments may be temporarily withheld if you earn too much. Once you turn your full retirement age, there is no penalty for working while collecting Social Security benefits, and your payment will be increased to give you credit for benefits that were withheld in the past.
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What Happens if You Work While Receiving Social Security? originally appeared on usnews.com
Update 04/17/26: This story was published at an earlier date and has been updated with new information.
