There’s no rule against working and claiming Social Security at the same time. Seniors do this every day, and it can help make your daily life a lot more comfortable. But for some workers earning more than $22,320 this year, it could also shrink their checks.
It’s important not to panic if you run into this. It might not be a bad thing in the long run. But it definitely helps to understand what’s going on, so here’s what you need to know.
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It depends on your age
Nothing will happen to your Social Security checks, regardless of your income, if you’re already at or over your full retirement age (FRA). The table below can help you find yours.
|
Birth Year |
Full Retirement Age (FRA) |
|---|---|
|
1943 to 1954 |
66 |
|
1955 |
66 and 2 months |
|
1956 |
66 and 4 months |
|
1957 |
66 and 6 months |
|
1958 |
66 and 8 months |
|
1959 |
66 and 10 months |
|
1960 and later |
67 |
Source: Social Security Administration.
But it’s a different story if you’re claiming Social Security before your FRA. In that case, you could run into the Social Security earnings test. This is where the government withholds money from your monthly benefit if your income from your job exceeds certain limits that change annually.
In 2024, you lose $1 from your checks for every $2 you earn over $22,320 if you’ll be under your FRA all year. If you’ll reach your FRA this year, you only lose $1 for every $3 you earn over $59,520, assuming you earn this much before your birthday.
There’s nothing you can do about this. The government automatically withholds these funds from your checks. But it’s not all bad news.
It’ll come back to you later
Those who have had money withheld from their Social Security checks due to the earnings test see their benefits rise slightly at their FRA. The government recalculates your checks at this time to account for the money it withheld previously. The more you had withheld under the earnings test, the bigger the bump to your new checks.
This move could benefit you in the long run, especially if you live a long life. But it could complicate your finances in the short term if you expected to get your usual checks all year long. You may have to reduce expenses or rely more upon income from your job or personal savings to cover all of your expenses today.
If you have any questions about how much you’ll lose from each benefit check due to the earnings test or how much you might gain later, it’s best to reach out to the Social Security Administration. You can do this by phone or by making an appointment at your local Social Security office.