Social Security earnings limit at age 62 - how much can I work without losing benefits?

For 2025, if you're under Full Retirement Age (FRA) for the entire year, the earnings limit is $23,400. That means you can earn up to that amount without any reduction in benefits. If you earn more, SSA will deduct $1 in benefits for every $2 you earn above that limit. The limit is higher ($62,160 for 2025) during the year you reach FRA, and there's no limit at all once you're past your FRA. It doesn't matter if you work for family or another employer. The SSA counts all earnings that are reported on your W-2 or self-employment income.

I went through this last year! Working for family DOES matter because they might not report everything correctly. My son didn't report some of my earnings and it caused a HUGE mess with Social Security when they found out. Make sure EVERYTHING is reported properly no matter who you work for!!!

To answer your follow-up question - no, these reductions are not permanent. They're only withheld during the years you exceed the earnings limit before reaching Full Retirement Age. Once you reach FRA, SSA will recalculate your benefit and give you credit for the months they reduced or withheld benefits. As for how they collect it, typically they'll withhold full monthly payments at the beginning of the year once you report you'll exceed the limit. If you unexpectedly earn more, they might assess an overpayment that you'll need to repay.

Is anyone else here completely SICK of these complicated rules?!! I've been trying to understand this stuff for months and keep getting different answers from every SSA agent I talk to. One told me $21k, another said $23k, and none of them explain how they actually take the money back! The whole system is designed to confuse us!!!

my sister earns like $30k and still gets her check but she's 67 so i think the rules are different after full retirement age. honestly tho just call ssa directly they can tell u exactly for ur situation

Something nobody mentioned yet - the earnings limit ONLY applies to wages and self-employment income. If you have investment income, rental income, pension payments, or other non-work income, that doesn't count toward the earnings limit. So if you're getting $15,000 from a rental property plus working part-time making $20,000, you're still under the $23,400 limit for 2025.

You might want to calculate whether claiming at 62 with the earnings restriction is financially beneficial compared to waiting until your Full Retirement Age. Your benefit increases by about 8% for each year you delay claiming between 62 and your FRA (which is likely 67 if you're turning 62 next year). If you're going to earn enough to have most of your SS benefit withheld anyway, it might make more financial sense to just continue working and delay claiming until you either reduce your hours or reach FRA.

also dont forget they take Medicare premiums out of ur SS check! my mom was surprised when her check was smaller than expected

One thing I learned the HARD WAY - overtime and bonuses count toward the earnings limit! I got hit with an overpayment because I didn't realize holiday pay and the bonus my company gave out would push me over the limit. Now I have to pay back $4,300!!! Make sure you count EVERYTHING when you're calculating your earnings!

One last point that may help you plan: The earnings test is applied monthly during your first year of retirement. For subsequent years, it's annual. This means in your first year claiming benefits, you could earn more than the monthly equivalent of the annual limit in some months (like before you officially retire) as long as you stay under the monthly limit in the months you're receiving benefits. So if you retire midyear, you might have different calculation for that first year versus subsequent years.

This is all incredibly helpful! I had no idea about some of these details, especially the monthly grace year provision that Mikayla and Ella mentioned. That could really change my planning since I'm thinking about retiring mid-year anyway. Just to make sure I understand everything correctly: For 2025, the limit is $23,400 annually, but in my first year of claiming benefits I only need to stay under $1,950 per month for the months I'm actually receiving Social Security? And then it switches to the annual calculation after that first year? Also, does anyone know if there are good online calculators that can help figure out the breakeven point between claiming at 62 with reduced benefits vs waiting until full retirement age? I think Savannah made a really good point about doing those calculations before deciding.

Just wanted to add one more important consideration that might help with your decision - if you're planning to work at your daughter's bakery, make sure you understand the difference between being an employee vs. being self-employed. If you're officially an employee getting a W-2, then your earnings are straightforward for the SSA calculations. But if you're considered self-employed (getting a 1099 or working as a contractor), the earnings test gets more complicated because it's based on net self-employment income after business expenses. Also, since you mentioned needing the extra income, don't forget that even if some of your Social Security gets withheld due to the earnings test, you'll get credit for those withheld benefits when you reach full retirement age - so it's more like a temporary reduction rather than money you lose forever. This might factor into your decision about whether to claim at 62 or wait. The online calculators Santiago mentioned are definitely worth using, especially since your situation involves ongoing part-time work rather than just a simple retire-and-claim scenario.