When thinking of retirement, the image that often comes to mind is one of relaxation and having the time to pursue leisurely activities. The unfortunate truth of the matter for a number of seniors is that due to rising costs, this supposedly relaxing time may need to be supplemented by working a job.
Social Security benefits will, of course be available to you, however, it may fall short in covering your living expenses as inflation continues to soar with each passing year. As such, a number of seniors may often opt to continue working while also claiming their Social Security benefits.
In terms of Social Security policies, working while also claiming benefits is perfectly fine, however, there are some caveats to the situation worth being aware of. Here is what you need to know.
Understanding the Social Security retirement age
Before getting into the rules surrounding working while claiming benefits, you will first need to have an understanding of the Full Retirement Age policy that comes with claiming benefits from the Social Security Administration (SSA). If you have earned the sufficient number of work credits by paying into the Social Security payroll tax during your working career, you will become eligible to claim benefits from the SSA upon your retirement.
Benefits can be claimed from age 62, however, this is considered as claiming early and will result in your benefits being reduced by up to 30%. This reduction comes into effect when claiming early due to the policy of a full retirement age, which is the age at which you become eligible to claim your full benefits. The retirement age has been gradually increasing since the 1983 amendments to bring it up to 67. In 2025, the retirement age increased to 66 years and 10 months for those born in 1959, and in 2026, it will finally reach 67 years for those born in 1960 and later.
Can you work while claiming benefits?
The short answer is yes, you can indeed work while claiming benefits from the SSA, however, there is the possibility of a reduction to your benefits depending on how much you earn.
If you decide to work and earn an income while also claiming Social Security benefits, you may be subject to a retirement earnings test. If your income exceeds a certain threshold, a portion of your benefit may be reduced. These income thresholds also differ relative to your full retirement age and are subject to change on a yearly basis.
If you have already reached your full retirement age, you can work and earn an income of any amount and it will not impact your Social Security benefits in any way. If, however, you have claimed benefits early and are still continuing to work, you may have to forfeit a portion of your benefits.
In 2025, if you have not yet reached full retirement age and you will not reach it for the full year, the income limit is $23,400. This means that for every $2 you earn above the $23,400 limit, you will lose $1 of your Social Security benefit.
If you have not yet reached full retirement age but will do so during the course of the year, the income limit is $62,160 and for every $3 that you earn above the $62,160 limit, $1 of your Social Security benefit will be lost. It is also worth reiterating that these deductions are temporary and will be stopped once you reach your full retirement age.
As noted above, the income limit for the retirement earnings test changes on yearly basis and for 2026, both income limits are projected to increase. According to current projections, the $23,400 income limit is estimated to increase to $24,360, while the $62,160 income limit will jump up to $64,800. The official figures will only be known once the COLA announcement is made by the SSA on October 24th.