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The Social Security Earnings Test: If you claim Social Security benefits before reaching full retirement age, the Social Security Administration (SSA) may temporarily withhold a portion of your monthly payment if your work income exceeds a certain threshold ($22,320 for 2024). The policy has evolved over the years, but the basic idea remains the same: You receive your full benefit when the SSA considers you “fully retired”. Beyond this, several other factors to be aware of include:

📌 Income sources: Not all forms of income count toward the earnings test. The SSA does not count other income sources such as pensions, annuities and investment income.

📌 Application to various benefit types: The earnings test also applies to Social Security spousal or survivor benefits, with the same income threshold and withholding rules.

📌 Reporting earnings: If subject to the earnings test, you should inform the SSA about your expected income for the coming year. They will adjust your payments and reconcile any over- or underpayments later.

📌 Changes near full retirement age: In the year you reach FRA, the limit becomes higher, and at FRA, it disappears altogether.

📌 Potential benefit increase: Continuing to work can increase your Social Security benefit by displacing lower-earning years from your top 35, which are used to calculate your benefit amount.

If you want to work in retirement, there should be nothing holding you back; certainly not Social Security.