Be mindful of these numbers if you plan to work and collect Social Security at the same time.
A lot of people assume that once they retire, there’s no sense in working. But holding down a job in retirement can actually do you a world of good, even if that job is very part-time.
For one thing, the extra income might help. The average Social Security recipient today collects just $1,920.48 per month. Even if you’re able to add in a modest nest egg on top of that, it may not be quite enough to pay your monthly bills comfortably and have money left over for the various activities you want to enjoy. A part-time job can help bridge that gap, and also give you more breathing room for those times when unplanned expenses pop up.
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Working part-time can also be a good thing for your mental health. Some retirees struggle with too much downtime, and it’s not uncommon to miss out on social connections once retirement kicks off and you’re no longer a part of office life.
Plus, working a job could keep you more physically active. That could be a good way to stave off health issues.
You should know that the Social Security Administration permits seniors to work while receiving their monthly benefits. But if you’re going to go this route, you’ll need to be mindful of the earnings-test limit.
What is the earnings-test limit?
Social Security’s earnings-test limit dictates how much income you can earn from a job before having a portion of your monthly benefits withheld. If you exceed that limit, you’ll initially get smaller Social Security checks. However, the benefits that are withheld aren’t lost forever. They’re given back to you once you reach full retirement age.
You should also know that the Social Security earnings-test limit does not apply to you if you’ve already reached full retirement age. You only need to worry about it if that hasn’t happened yet. Come full retirement age, you could earn $200,000 a year, and it wouldn’t result in any withheld Social Security.
What are the 2025 earnings-test limits?
Social Security’s earnings-test limits are rising in 2025. Currently, you can earn up to $22,320 without having your Social Security benefits withheld. In 2025, that threshold is increasing to $23,400. From there, you’ll have $1 in benefits withheld per $2 of earnings.
However, there’s a different earnings-test limit for people who will be reaching full retirement age in 2025 but aren’t there at the start of the year. That limit is $62,160, up from $59,520 in 2024. From there, you’ll have $1 in Social Security benefits withheld for every $3 of earnings.
Don’t let misinformation stop you from holding down a job
If you like the idea of working part-time as a retiree, don’t not do it because you’re afraid of losing your Social Security checks. You can earn a fair amount of money in 2025 before withheld benefits come into play. Now that you know what next year’s earnings-test limits look like, you can manage your working hours and wages strategically to avoid a problem.