Intro
This is one of the most confusing and misunderstood rules in social security. And the answer is: It depends
It depends on whether or not you are at the year of your Full Retirement Age (FRA), over your FRA, or under your FRA.
Here are the 2025 rules for earning while taking social security.
| Your Age Compared to FRA | 2025 Limit | What Happens Above the Limit |
|---|---|---|
| Under FRA | $23,400/year | $1 of benefits withheld per $2 of earnings above limit |
| Year reach FRA | $62,160/year | $1 of benefits withheld per $3 of earnings above limit |
| Month reach FRA and beyond | No Limit | No Penalty |
Let’s start with the easy one first. Over your FRA.
If you are over your Full Retirement Age and taking social security
If it is the year(s) after the year you turn your Full Retirement Age, then there is no impact on your social security, regardless of how much you earn. You can work a high paying job and it will have zero impact to your social security payment.
If you are under your Full Retirement Age and taking social security
An earnings test applies if you have not reached your FRA yet and are taking social security. In 2025 for example, for every $2 you earn over $23,400, you will reduce your social security annual payment by $1.
Let’s review an example:
Mrs. Smith is 64 (under her FRA) and earns $85,000 a year. She turned on her social security and is eligible for $30,000 a year in social security benefits.
Apply the earnings test:
$85,000 (earned income) – $23,400 (social security provided $ limit) = $61,600 earnings over the $23,400 limit provided by social security
$61,600 ÷ 2 (for every $2 of earnings over $23,400, a $1 reduction applies) = $30,800
Therefore, Mrs. Smith’s benefit is reduced by $30,800, eliminating 100% of her $30,000 social security benefit that year.
It’s important to note that this is not a permanent reduction. The earnings test only applies while you are under your Full Retirement Age. But it begs the question of whether or not Mrs. Smith should have applied for her benefit prior to Full Retirement Age. Because every year she takes prior to her FRA, she permanently reduces the benefit by 6% per year, and she isn’t even able to get the benefit from it because she is earning too much.
A better option might have been to hold off on taking social security until after she reaches FRA or stops working, allowing it to grow 8% per year.
Note: For married couples, the earnings test is based on each spouse’s earnings alone, not the combined earned income.
If you are at the year you turn your Full Retirement Age and taking social security
In the calendar year you reach your FRA, Social Security only tests the wages or net self-employment you earn before the month you hit FRA, and uses a higher annual limit. In 2025 as an example, you can earn up to $62,160 at your FRA year, before the earnings test begins to apply. For every $3 of earnings over $62,160, your social security payment will reduce by $1.
While testing is still done the year you reach your FRA, the testing is less stringent than years before you reach your FRA.
So, when deciding when to turn on social security, a critical question to ask is: Am I under my FRA and am I still going to earn income? If so, make sure to calculate the impact using the chart above.
Last note: Only earned income applies to the social security earnings test. Pension, rental income and other passive income sources do not apply. The rules around this only take into account earned income, which is W-2 or net earnings from self-employment.
Social Security isn’t just about when you want income—it’s about how that income interacts with your work. Turning benefits on too early while still earning can mean permanently locking in a lower benefit while receiving little or nothing in the short term. In many cases, patience is rewarded.
Before filing, ask yourself:
- Am I still earning income?
- Will the earnings test apply to me?
- Would waiting allow my benefit to grow meaningfully?
These aren’t just technical questions—they can add up to tens or even hundreds of thousands of dollars over a lifetime.
Social Security decisions don’t exist in a vacuum. They should be coordinated with your career plans, cash flow needs, taxes, and long-term retirement goals. Getting it right can create flexibility and confidence; getting it wrong can quietly erode your retirement income.
At Vocare Wealth Advisors, we believe retirement should be approached with purpose and clarity, not guesswork. If you’re unsure when to turn on Social Security—or whether you should wait—we’re here to help you think through the decision in the context of your full financial picture.
The Vocare Wealth Advisors Team
