Today’s high cost of living is encouraging many retirement-age people to remain in the workforce. But can you collect Social Security and still work full time? The short answer is yes, you can—but it’s worth knowing some details before doing so, because there are a range of rules and taxes that come into play. Bottom Line Personal asked Social Security expert Martha Shedden what beneficiaries need to know…
Working Can Lead to Withholding
If your earnings exceed certain limits while you receive Social Security benefits, some of your benefits might be “withheld.” This rule applies only if you have not yet reached your “full retirement age” (see below). Having benefits withheld isn’t the same as losing them—after you reach full retirement age, any benefits that have been withheld will be essentially returned to you in the form of an increase to your monthly benefit.
Full retirement age is between 65 and 67 depending on year of birth…
If you were born between 1943 and 1954, full retirement age is 66.
If you were born in or after the 1960s, full retirement age is 67.
If you were born between 1955 and 1959, full retirement age is between 66 and 67.
Typically, $1 of your benefit is withheld for every $2 earned above a threshold—in 2025, that threshold is $23,400, but it’s adjusted each year to keep pace with inflation.
Different rules apply during the year in which you reach full retirement age—$1 is withheld for every $3 earned above a significantly higher threshold ($62,160 in 2025)…but only until the end of month prior to the month in which you reach full retirement age. Once you reach the month of full retirement age, withholding no longer applies no matter how much you earn.
Withholding thresholds apply only to earned income, such as wages and self-employment income. It does not apply to investment or other forms of income. Moreover, withholding thresholds apply only to the earnings of the benefit recipient—a spouse’s earnings don’t count even if the couple files their income taxes jointly.
Income Tax Implications
Withholding isn’t the only potential complication created by working while receiving Social Security benefits—there can be tax consequences, too.
Up to 50% of your Social Security benefit will be subject to income tax if your “combined income” exceeds $25,000 and up to $34,000 (over $32,000 and up to $44,000 if married filing jointly)…and up to 85% of your benefits will be subject to income taxes if your combined income exceeds $34,000 ($44,000 if married filing jointly). Combined income is computed by taking Adjusted Gross Income (AGI) and adding any nontaxable interest earned plus half of Social Security benefits received. Income earned from working full-time or even part-time could easily push someone past those thresholds and lead to greater taxation of his/her benefits. There has been some discussion in Washington of eliminating the taxation of Social Security benefits, but as of April 2025, that has not yet occurred.
Unlike benefits withheld, money lost to the taxation of benefits will not be returned to you later.
Also worth noting: Your earned income will be subject to the hefty payroll taxes that finance the Social Security system even if you’re already receiving your Social Security benefits. These taxes do not end when benefits begin.
Boosting Future Benefits
Any income you earn while already receiving Social Security benefits could increase your future benefits. The Social Security Administration (SSA) bases the size of your monthly benefit in part on how much you earned during your 35 highest-earning years on an inflation-adjusted basis, and income earned after benefits have begun can be included in that calculation. Example: If you worked only 34 years before retiring and starting your benefits, then later return to the workplace for one more year, the amount you earn during that year will replace a $0 in this calculation, slightly increasing your future benefits.
How Much Money Can You Make and Still Get SSI
Supplemental Security Income (SSI) is managed by the SSA, but it’s a separate program intended for people facing major financial difficulty, and it has its own set of rules and strict earnings limits. As of 2025, SSI eligibility was restricted to people whose total income, including Social Security benefits, is below $2019 per month. Certain income does not count toward this figure—see SSA.gov/ssi/text-income-ussi.htm for details. Beneficiaries’ assets also cannot exceed $2,000 for an individual or $3,000 for a married couple living together, again with certain exceptions.
What To Do
If your earnings are sufficient to trigger withholding and/or cause a significant portion of your Social Security benefits to face income taxes, consider delaying the start of your Social Security benefits until you reach your full retirement age or stop working. Exception: It could be worth starting your benefits despite withholding and tax consequences if you need those benefits to pay your bills.
If you’ve already started your benefits but wish you hadn’t, there might be a solution. You can essentially undo a decision to claim benefits by “withdrawing your application” and paying back any benefits already received—but only if less than 12 months have passed since you originally filed. Or you can suspend your benefit, thus increasing the benefit you’ll receive once you restart your benefits later—but only if you have reached your full retirement age but are not yet 70.
If you return to the workforce while receiving Social Security benefits prior to your full retirement age, promptly inform the SSA that you’ve done so. Otherwise, the SSA might not discover that it should have been withholding some of your benefits until months or years later…at which point it could completely suspend your benefit until this “overpayment” is offset.
If you receive significant income from a corporation that you own while receiving Social Security benefits, consider giving yourself a pay cut. If you claim money from your corporation as a salary, it will be subject to payroll taxes and might trigger withholding…but if you lower your salary and instead let the business have a larger profit, those profits should not be subject to these consequences. Speak with your tax preparer and/or tax attorney to confirm that you’re handling this in a manner that is both tax-smart and legal.
