Can I work while collecting Social Security benefits? Yes you can work and collect benefits at the same time. However, depending on your age and income, your benefit may be reduced. If you are working while collecting, and are between the ages of 62 and Full Retirement Age (FRA), you will be subject to the Retirement Earnings Test. During this time, if you earn more than the earnings limit for that year, your Social Security benefit will be reduced.
How does the Retirement Earnings Test work and what is the 2021 earnings limit? There are two earnings limit thresholds. In 2021, the lower earnings limit is $18,960. This applies to those who are age 62 up to the year they reach FRA. The reduction is $1 in benefits for every $2 you earn exceeding the lower limit. The upper threshold applies to earnings in the year you turn your FRA. This amount is $50,520 for 2021. The reduction is $1 in benefits for every $3 you earn exceeding the upper limit.
What happens when I reach my Full Retirement Age (FRA)? The earnings limit no longer applies starting the month you turn your FRA. This means you can collect Social Security benefits and work without having a reduction in benefits.
What are considered as earnings? Your wages you make from your job are considered your earnings. If you are self-employed, your net earnings count as your earnings. Bonuses, commissions, and vacation pay are included as earnings, while pensions, annuities, and investment income are not.
Do I lose the money in benefits that was reduced or will I get it back later? You don’t really “lose” the money. When you reach your FRA, the Social Security Administration increases your monthly benefit to account for the prior withholding.