Still Working and Collecting Social Security? Watch Out for These Earnings Limits

Missy E
November 14, 2025

Key Takeaways

If you’re under your full retirement age and still working while collecting Social Security, your benefits may be reduced depending on how much you earn in 2025.
Once you reach full retirement age, the earnings limit no longer applies, and your full benefits resume regardless of how much you earn.

Working While Receiving Social Security Benefits

If you’re receiving Social Security retirement benefits and still working in 2025, there are important earnings limits that can impact how much of your benefit you actually receive. This is especially relevant for government employees

who may continue working after filing for Social Security or retire and return to the workforce part-time.

While Social Security provides a stable income source, continuing to work can affect how much you receive depending on your age and how much you earn each year.

How the Social Security Earnings Limit Works

The Social Security Administration (SSA) uses annual earnings limits to determine whether your benefits will be reduced while you are still working. These limits only apply if you are under your full retirement age (FRA).

For 2025, if you are under FRA for the entire year, the earnings limit is $23,480. If you earn more than this, your Social Security benefits are reduced by $1 for every $2 you earn over the limit.
In the year you reach your FRA, a higher earnings limit applies. For 2025, that threshold is $62,160. In this special year, your benefits are reduced by $1 for every $3 you earn above the limit, but only for earnings before the month you reach your FRA.
Once you reach your FRA, the earnings limit disappears entirely. You can work and earn as much as you want without affecting your Social Security benefits.

What Counts as Earnings?

Earnings that count toward the limit include:

Wages from a job
Net earnings from self-employment
Bonuses and commissions

Earnings do not include:

Investment income
TSP withdrawals
Pension payments
Annuities

So, if you’re retired and receiving distributions from your Thrift Savings Plan (TSP) or a government pension, those do not count toward the Social Security earnings limit.

Understanding Full Retirement Age in 2025

Your full retirement age depends on the year you were born. In 2025:

If you were born in 1958, your FRA is 66 and 8 months.
If you were born in 1959, your FRA is 66 and 10 months.
If you were born in 1960 or later, your FRA is 67.

Knowing your exact FRA is essential when planning your work and benefit strategy. The closer you are to FRA, the smaller the impact of the earnings limit.

Impact of the Earnings Limit on Public Sector Workers

For government employees who retire but choose to reenter the workforce or transition to a different public sector job, the earnings limit becomes a significant consideration. Even if your retirement benefits from your public service aren’t impacted, your Social Security benefits might be.

This can create confusion if you assume all retirement income is treated equally. In truth, only earned income from actual work impacts your Social Security checks.

Also, government retirees who are eligible for Social Security due to past non-government employment must still track their current earnings if they have not reached FRA.

Planning Your Work Schedule Around the Earnings Limit

If you’re approaching or under your full retirement age and plan to work in 2025, you can potentially:

Reduce your work hours to stay below the $23,480 limit
Delay Social Security benefits until you reach FRA to avoid reductions
Time your retirement mid-year, especially if reaching FRA later in 2025, so only some months are subject to the lower threshold

The SSA uses monthly calculations in some cases during the first year you receive benefits, offering flexibility if you retire mid-year.

Earning More Than the Limit Isn’t Always a Bad Thing

While it may seem frustrating to lose some benefits, the SSA does not permanently withhold those funds. Once you reach full retirement age, your benefit is recalculated, and any previously withheld amounts due to excess earnings are used to increase your future monthly payments.

That means you’re not actually losing money long-term. Instead, you’re temporarily giving up part of your benefit and essentially getting it back later.

If You’re Already Receiving a Government Pension

Many public sector retirees are already receiving a pension and may also qualify for Social Security benefits. It’s important to remember that:

Your pension doesn’t affect the earnings limit.
Your employment income from new work does affect the earnings limit.

So, if you’re consulting, teaching, or working part-time after retirement, track your earned income closely if you haven’t yet reached FRA.

Also, be aware of the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP), which may impact your actual Social Security benefit amount—but they are separate from the annual earnings limit.

Special Considerations for 2025

With cost-of-living adjustments (COLA) in effect and updated wage limits in 2025, it’s essential to make sure your benefit planning reflects this year’s numbers:

$23,480: Limit for those under FRA all year
$62,160: Limit for those reaching FRA in 2025

If your work income is variable, like in consulting or part-time seasonal roles, it’s even more important to track your total earnings throughout the year to avoid surprises.

How Social Security Tracks and Reduces Your Benefit

Social Security typically withholds future payments to make up for any reductions caused by earning over the limit. Here’s how it works:

If you’re collecting benefits and working, you still report your income to the SSA.
The SSA will estimate how much to withhold monthly.
Any overpayments or underpayments are corrected later through adjustments.

You’ll usually receive a letter from the SSA explaining how much will be withheld and why.

Strategies to Avoid Penalties or Surprise Reductions

If you’re concerned about your benefits being withheld unexpectedly, consider the following strategies:

Plan retirement carefully: If you’re close to FRA, you may delay benefits until after reaching it.
Work part-time: Keep earnings below the threshold for that year.
Use non-earned income: Consider drawing from retirement accounts instead of earned wages.
Report income proactively: Inform SSA about any income changes promptly.

How This Affects Survivor and Spousal Benefits

Earnings limits also apply to survivors and spouses receiving Social Security benefits based on your record if they are working and under FRA. So, it’s not just your own benefit that’s at stake—dependents must also consider how much they earn.

If a spouse is receiving a benefit on your record and continues to work, their earnings will be subject to the same limits as anyone else under FRA.

Annual Adjustments to the Earnings Limit

Each year, the SSA reviews and adjusts the earnings limit based on national wage trends. That means the thresholds you see in 2025 could be higher in 2026, depending on inflation and overall wage growth.

Planning should therefore include:

Reviewing the SSA earnings limits every year
Adjusting work and benefit strategies accordingly

These changes are typically announced in the fall for the following year.

When It Makes Sense to Delay Benefits

Delaying your Social Security retirement benefits offers two major advantages:

Avoid the earnings limit entirely if you’re working and under FRA
Earn delayed retirement credits, increasing your monthly benefit (up to age 70)

Public sector employees who are eligible for other retirement benefits may find it beneficial to delay Social Security until stopping work entirely.

Don’t Confuse Earnings Limit with Taxable Benefits

The earnings limit determines benefit reductions, not taxation. Your Social Security benefits may still be taxable based on your overall income, including pensions, wages, and withdrawals from accounts like TSP.

The earnings test is a separate rule, applying before full retirement age, while income taxes apply based on annual income levels regardless of age.

Understanding both helps you make accurate estimates of your net retirement income.

Coordinating Social Security with Other Retirement Income

It’s crucial for government retirees to look at the big picture when planning:

How much you’ll receive from your pension
When to begin Social Security
Whether to take distributions from TSP or other accounts
How working part-time may reduce or delay Social Security

Balancing all these elements can help you maintain steady income throughout retirement without triggering reductions or unnecessary taxes.

Staying Informed in 2025 and Beyond

Social Security planning is not a one-time event. You should revisit your earnings projections and benefit calculations every year, especially if you’re working while collecting benefits.

Keep detailed records, monitor changes in income, and consider discussing your strategy with a professional.

Avoiding Benefit Reductions While Working in Retirement

Working during retirement is a practical choice for many government employees, but the Social Security earnings limit can surprise those who aren’t prepared. By understanding how it works, planning carefully around your FRA, and coordinating with other retirement benefits, you can protect your income and make informed decisions.

To get tailored advice based on your specific circumstances, speak with a licensed agent listed on this website who can help you weigh your options and avoid costly mistakes.