Can You Still Work and Collect Social Security? 

Glenn Kirst is a lead planning excellence consultant at Northwestern Mutual.

Once you turn 62, you can start collecting Social Security, which can be a great source of guaranteed income in retirement. But at age 62, you may not be quite ready to take your foot off the gas and stop working completely. So, can you work and collect Social Security at the same time? The short answer is yes, but your earnings can affect the size of the benefit you receive. Here’s a rundown of how working while you collect Social Security works.

Can you work and collect Social Security?

Even if you are in retirement age range, you might decide to continue working at your full-time job to save more for retirement and take advantage of catch-up contributions all while collecting Social Security as soon as you’re eligible at 62. Or even if you do retire, you may choose to work part time or do consulting work to keep busy and make extra money.

As of June 2023, close to 90 percent of people aged 65 and older were receiving Social Security benefits—and more than a quarter of folks aged 65 to 74 were still in the workforce in 2022. So, it’s likely that a good chunk of Americans work and collect Social Security at the same time. Though there’s no rule against doing this, your benefit amount could decrease if you earn above a certain amount (more on this in a bit).

Will my Social Security benefit increase if I continue to work?

How much you’ll recieve in Social Security depends on many factors, including your income in the years you were working. So regardless of your age and whether you’re already receiving payments, the Social Security Administration (SSA) will review your earnings every year and refigure your benefit if necessary—which could lead to an increase in benefits.

How much money can I make in 2024 and still collect Social Security?

It is possible to earn an income and continue to collect a benefit; however, the benefit amount may be reduced based on how much money you make. The SSA sets an income limit, and if you make more than that amount, any amount over the limit will impact your benefits.

Here are the income limit rules in 2024:

• If you’re younger than your full retirement age for the entire year, you can earn up to $22,320 before your benefit is impacted. For every $2 you earn above that amount, SSA will deduct $1 from your benefits check.

• If you’ll reach your full retirement age within the calendar year, the income limit increases to $59,520. For earnings above that amount, the SSA will deduct $1 from your monthly benefit for every $3 you earn, but this will stop when you reach full retirement age.

• Beginning on the day you reach full retirement age, you can earn as much as you’d like without your benefit payment being impacted.

Let’s look at some examples to see how this plays out:

Let’s say as a 65-year-old, you made $60,000 in 2024 and were eligible for an annual benefit of $22,884 (based on a monthly benefit of $1,907, which is the the average Social Security payment for retired workers in January 2024). That means $37,680 of your income would fall over the income limit, and your benefit would be reduced by $18,840 for a total benefit amount of $4,044. In this situation, collecting before retirement age may not make sense.

But let’s say instead you’re still making $60,000 in 2024, and instead you’re reaching the full retirement age this year. In the months leading up to your birthday, only $480 would fall above the limit, meaning your benefit payment amount will be reduced by much less—and only in the months leading up to your birthday. In this hypothetical situation, waiting just one year to start taking Social Security would have made much more sense for you.

What income counts toward the limit?

The SSA will only consider wages in your income, so that excludes:

• Investment earnings.

• Unemployment income.

• Pensions.

• Annuities.

• A spouse’s income.

What happens when I reach my full retirement age?

The income threshold disappears once you hit your full retirement age. Once you hit full retirement age, there is no reduction to your benefit based on how much you make.

Is Social Security taxable if you’re still working?

Whether you have to pay taxes on your Social Security benefit depends on your income—not on whether or not you’re working. The IRS takes into account both income from a job and income from other sources.

To determine whether you’ll owe taxes, you’ll calculate your combined income, which involves adding 50 percent of your Social Security benefits to your adjusted gross income and nontaxable interest. If your combined income sits within a certain threshold, your benefit payment could be subject to tax.

The calculation can get a bit complicated, but the most important thing to know is that you’ll never be taxed on more than 85 percent of your benefits.

Here’s a general look at how the numbers shake out:

• Individual tax filers: If your combined income is between $25,000 and $34,000, you may be taxed on up to 50 percent of your benefits. If you earn more than $34,000, up to 85 percent of your benefits may be taxable.

• Married couples filing jointly: If your combined income is between $32,000 and $44,000, up to half of your benefits may be taxed. If you earn more than $44,000, you could be taxed on up to 85 percent of your benefits.

What are the pros and cons of collecting Social Security while working?

When to begin collecting Social Security—and when to stop working—are truly personal decisions that will depend on your situation. Here are some things to think about as you weigh these decisions:

Pros of collecting Social Security while you work

Some upsides of working and collecting Social Security include:

It could provide much-needed income.

If your lifestyle has changed or you’ve experienced a financial emergency or unexpected health care costs, Social Security benefits could help you cover additional expenses.

It could help you work toward financial goals.

A monthly Social Security payment can free up money to put toward other important goals. That might be investing, traveling, starting a side business or funding your legacy plan.

There’s no penalty if you’ve reached full retirement age.

Once you've reached full retirement age, money you have coming in from a job won’t affect your Social Security benefit payment amount. So in addition to income you’re earning with a job, income from Social Security could help you move more quickly toward financial goals—like a full retirement.

Cons of collecting Social Security while you work

Here are some downsides you may want to consider before collecting Social Security while you work:

Taking Social Security before your full retirement age will result in a smaller benefit for life.

If you start taking Social Security at age 62, it could reduce your total benefit amount by as much as 30 percent. But if you delay taking your benefit after you reach your full retirement age, your benefit will increase 8 percent each year that you wait until you turn 70. That could make a significant difference in your total benefit amount—and your total retirement income.

Working could reduce your Social Security benefit.

If you’re under the full retirement age, your benefit may be reduced if you earn more than the allowable limit. Depending on how much you make, this could significantly reduce how much you collect. (You may even reduce your benefit to zero.)

You might owe more in taxes.

Bumping up your earnings by working could result in a higher tax bill. You may also have to pay taxes on the Social Security benefit you receive, depending on your annual combined income.

When should you start collecting Social Security?

Decisions about when to begin claiming Social Security and when to stop working will completely depend on your financial situation. How much do you have saved? What other financial pieces do you have in place? What are you hoping to do in retirement? Are you supporting others or only yourself? These are all questions you'll want to answer when making these decisions.

It can feel overwhelming to juggle all the variables on your own, but a financial advisor can be a helpful resource to guide you through these decisions.

When you meet with a Northwestern Mutual financial advisor, your advisor will ask you questions like those above (and many more) to get a good understanding of what’s important to you and what you’re already doing. From there, you’ll create a plan together that maximizes opportunities available to you and accounts for things you may not have thought about. Whether your plan includes working, Social Security or both, your advisor can share the information you need to make educated decisions about how you’ll reach your financial goals.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.