Navigating the complexities of Social Security benefits can be challenging, especially when you’re considering working while receiving benefits. Many people wonder, “How Much Money Can You Make And Still Get Ssi?” It’s a crucial question for those looking to supplement their income without jeopardizing their Social Security payments. This guide will clarify the earnings limits and how they might affect your benefits, ensuring you understand the rules and can make informed financial decisions.
Earning Limits and Your Social Security Benefits: What You Need to Know
When you receive Social Security retirement benefits, the Social Security Administration (SSA) considers you retired. However, you can still work and receive benefits simultaneously. The key is understanding the earnings limits set by the SSA, which determine whether your benefits will be reduced. These limits are particularly important if you are younger than your full retirement age.
Annual Earnings Limit Before Full Retirement Age
If you are under your full retirement age for the entire year, there’s an annual earnings limit that the SSA applies. For 2025, this limit is $23,400. If your earnings exceed this amount, your Social Security benefits will be reduced. Specifically, for every $2 you earn above the annual limit, $1 will be deducted from your benefit payments.
For example, imagine you are entitled to Social Security benefits and are under full retirement age throughout 2025. If you earn $25,400, which is $2,000 over the $23,400 limit, your benefits will be reduced by $1,000 ($1 for every $2 over the limit).
Earnings Limit in the Year You Reach Full Retirement Age
The rules are slightly different in the year you reach your full retirement age. In 2025, the earnings limit for the months before you reach full retirement age is $62,160. This is a higher limit compared to those who are younger than full retirement age for the entire year. For earnings above this limit, $1 in benefits will be deducted for every $3 earned. It’s important to note that only earnings up to the month before you reach your full retirement age are counted towards this limit; earnings after that month are not considered.
For instance, if you reach full retirement age in September 2025, and you earn $65,160 from January to August (the months before you reach full retirement age), you’ve exceeded the $62,160 limit by $3,000. Your benefits will be reduced by $1,000 ($1 for every $3 over the limit) for those months.
No Earnings Limit at Full Retirement Age and Beyond
Once you reach your full retirement age, the earnings limit disappears. Starting from the month you reach full retirement age, there is no limit on how much you can earn and still receive your full Social Security benefits. This is a significant advantage, allowing you to work and earn as much as you want without any reduction in your benefits.
Moreover, the SSA will recalculate your benefit amount to give you credit for any months your benefits were reduced or withheld due to excess earnings before reaching full retirement age. This ensures that you eventually receive the full benefits you are entitled to, even if you worked while receiving benefits before full retirement age.
How Earnings Are Deducted From Your Benefits
To illustrate how these deductions work, let’s consider a couple of scenarios in 2025:
Scenario 1: Under Full Retirement Age All Year
Let’s say you are under full retirement age for all of 2025 and are entitled to $900 per month in Social Security benefits (totaling $10,800 for the year). If you work and earn $33,400 during the year, you have exceeded the annual limit of $23,400 by $10,000.
- Your Social Security benefits will be reduced by $5,000 ($1 for every $2 you earned above the limit).
- You will receive $5,800 of your $10,800 in benefits for the year ($10,800 – $5,000 = $5,800).
Scenario 2: Reaching Full Retirement Age in September 2025
Assume you reach full retirement age in September 2025 and are entitled to $900 per month in benefits ($10,800 for the year). You earn $70,000 during the year, with $64,000 earned from January through August (before reaching full retirement age). This is $1,840 more than the limit of $62,160 for the months before full retirement age.
- Your Social Security benefits will be reduced through August by $613 ($1 for every $3 you earned more than the limit – rounded from 1840/3).
- You would still receive approximately $6,587 out of your $7,200 benefits for the first eight months ($7,200 – $613 = $6,587).
- Starting in September 2025, when you reach full retirement age, you will receive your full benefit of $900 per month, regardless of how much you continue to earn for the rest of the year.
What Counts as Earnings for Social Security?
When the SSA calculates how much to deduct from your benefits, they primarily consider your wages from employment and your net profit if you are self-employed. This includes:
- Salaries
- Wages
- Bonuses
- Commissions
- Vacation pay
However, not all income is counted as earnings for Social Security purposes. The following types of income are generally not included when calculating your earnings limit:
- Pensions
- Annuities
- Investment income (like dividends or capital gains)
- Interest
- Veterans benefits
- Other government or military retirement benefits
Understanding what counts as earnings is crucial for accurately estimating how your work income might affect your Social Security benefits.
Maximize Your Benefits and Financial Planning
Working while receiving Social Security benefits can be a strategic way to boost your overall income. By understanding the earnings limits and how they apply to your situation, you can make informed decisions about your work and retirement plans. Remember, once you reach full retirement age, the earnings limit is lifted, offering greater financial flexibility. Furthermore, working can potentially increase your future Social Security benefits through annual recalculations based on your most recent earnings. For personalized estimates of how your earnings might affect your benefits, the SSA provides an earnings test calculator that can be a helpful tool in your financial planning.
