There are plenty of good reasons to hold down a job in retirement. First of all, if you're struggling to get by, based on your savings and Social Security benefits alone, working is a great way to boost your income.
Also, working as a retiree has benefits that aren't just financial. For many people, work can serve as a social outlet and a reason to get out of the house. It's also an inexpensive way to occupy your time.
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You are allowed to work while collecting Social Security. And once you reach full retirement age, or FRA, you can earn any amount of income without affecting your Social Security benefits. FRA is 67 for anyone born in 1960 or later.
But many people opt to sign up for Social Security before FRA. Doing so gets them their money sooner, so they're willing to accept a reduced monthly benefit for life in exchange.
If you're working and collecting Social Security before having reached FRA, then you'll want to be mindful of the earning-test limit. That threshold dictates how much income you can earn before you risk having some of your Social Security benefits withheld.
In 2023, the earnings-test limit is $21,240, or $56,520 if you'll be reaching FRA this year. But that limit is rising in 2024, which means seniors who are working and collecting Social Security simultaneously can earn more money without having their benefits impacted.
Introducing the 2024 earnings-test limits
In 2024, you can earn up to $22,320 without having your Social Security benefits withheld. But beyond that point, you'll have $1 in benefits withheld per $2 of earnings.
The limit is much higher if you'll be reaching FRA in 2024. In that case, you can earn up to $59,520 without having benefits impacted. From there, you'll have $1 in Social Security withheld per $3 of earnings.
The good news is that withheld Social Security benefits aren't lost completely. Rather, any sum that's withheld will be paid to you later, once you reach FRA.
But remember, when you claim Social Security ahead of FRA, you'll slash your monthly benefit for life. If you're going to do that, you probably don't want to put yourself in a situation where you're having a large chunk of your benefits withheld.
Keep reading up on Social Security
Although Social Security has been around for a long time, the program tends to change every year. And it's important to keep tabs on them if you're collecting benefits.
Now that you know what the 2024 earnings-test limits look like, you can be strategic in how you earn money. For example, if you currently earn $22,000 a year through part-time work and your hourly rate isn't increasing in 2024, then you may want to avoid taking on more hours. This way, you won't exceed the $22,320 mark.
In some cases, it can make sense to boost your earnings from work, even if it means having some Social Security income withheld. The key, either way, is to be aware of the limits you'll be subject to so that you can plan accordingly.
FAQs
In 2024, you can earn up to $22,320 without having your Social Security benefits withheld. But beyond that point, you'll have $1 in benefits withheld per $2 of earnings. The limit is much higher if you'll be reaching FRA in 2024. In that case, you can earn up to $59,520 without having benefits impacted.
What is the maximum you can earn while on Social Security in 2024? ›
In 2024, if you're under full retirement age, the annual earnings limit is $22,320. If you will reach full retirement age in 2024, the limit on your earnings for the months before full retirement age is $59,520.
What is the maximum Social Security tax for 2024? ›
However, for 2024, the tax limit goes from $160,200 to $168,600, an increase of $8,400 from the previous year. That is significantly less than the $13,200 increase from 2022 to 2023, the largest recorded increase. As a result, the maximum Social Security tax jumps from $9,932 to $10,453.
At what age is Social Security no longer taxed? ›
Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.
What is the 5 year rule for Social Security? ›
You must have worked and paid Social Security taxes in five of the last 10 years. If you also get a pension from a job where you didn't pay Social Security taxes (e.g., a civil service or teacher's pension), your Social Security benefit might be reduced.
At what age can you earn unlimited income without affecting Social Security? ›
later, then your full retirement age for retirement insurance benefits is 67. If you work, and are at full retirement age or older, you may keep all of your benefits, no matter how much you earn.
How do I get the $16728 Social Security bonus? ›
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
At what income limit does Social Security become taxable? ›
You will pay federal income taxes on your benefits if your combined income (50% of your benefit amount plus any other earned income) exceeds $25,000/year filing individually or $32,000/year filing jointly. You can pay the IRS directly or have taxes withheld from your payment.
Why are Americans getting $4800 from Social Security? ›
Social Security benefits grew by 3.2 percent this year, in accordance with this year's calculated cost of living adjustment (COLA). However, not all payments arrive on the same day. For a select group of seniors, today is the day you can expect a payment of up to $4,800.
What income counts towards the Social Security earnings limit? ›
Only earned income, your wages, or net income from self-employment is covered by Social Security. If money was withheld from your wages for “Social Security” or “FICA,” your wages are covered by Social Security.
Some seniors must pay federal income taxes on their Social Security benefits, depending on their income and filing status. If you have a source of income that is substantially more than what you receive from your Social Security benefits, you will pay federal income taxes on up to 85% of your benefits.
At what age do you stop filing taxes? ›
At What Age Can You Stop Filing Taxes? Taxes aren't determined by age, so you will never age out of paying taxes. Basically, if you're 65 or older, you have to file a tax return in 2022 if your gross income is $14,700 or higher. If you're married filing jointly and both 65 or older, that amount is $28,700.
How much money can a senior make without paying taxes? ›
If you are at least 65, unmarried, and receive $15,700 or more in nonexempt income in addition to your Social Security benefits, you typically need to file a federal income tax return (tax year 2023).
When my husband dies, do I get his Social Security and mine? ›
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
Do I get my ex husband's Social Security if he died? ›
A surviving spouse, surviving divorced spouse, unmarried child, or dependent parent may be eligible for monthly survivor benefits based on the deceased worker's earnings. In addition, a one-time lump sum death payment of $255 can be made to a qualifying spouse or child if they meet certain requirements.
How much can I earn while on Social Security in 2024? ›
If you have filed for your Social Security retirement benefit and you are under your FRA, the earnings limit for 2024 is $22,320/year ($1,860/month). This means that you can earn up to $22,320 and continue to receive your Social Security retirement benefit.
What is substantial gainful activity in 2024? ›
What is Substantial Gainful Activity (SGA)? For most disability applicants, the Social Security Administration (SSA) definition of substantial gainful activity means earning above a specific dollar amount. In 2024, this amount is $1,550 or more a month, or $2,590 if you're blind.
Is the Social Security spousal rule officially finished in 2024? ›
A longstanding Social Security spousal rule concludes this year for most individuals, except those who turned 70 on Jan. 1, 2024. The rule, permitting recipients to switch between their benefits and their spouse's for maximum payouts, has been a strategy in place for decades.
How much money can you make working if you collect Social Security at 62? ›
Social Security Earnings Limit
Ask an Advisor: How Much Money Can I Earn Working After Taking Social Security at Age 62? If you claim your benefit before hitting your full retirement age, you'll be subject to the earnings limit. The specific amount adjusts each year, but for 2023 it's $21,240.
