Can I Collect Social Security While I'm Still Working?

Yes, you can start to collect Social Security retirement benefits even if you're still working. But it isn't always a good idea. Drawing a salary could reduce the amount of benefit you can claim until you hit full retirement age.

Retirement Age and Social Security

If you're eligible for Social Security, you can start collecting your benefits as early as age 62, and you can also continue to work. Before you do so, it's important to note that unless you've reached your full retirement age (such as 66 or 67), you'll be doubly penalized:

• By taking Social Security early, you'll be accepting a benefit that is permanently reduced.
• If you earn over a certain amount, your benefits will be temporarily reduced.

According to the Social Security Administration (SAA), the full retirement age in the U.S. is 66 years and four months (if you were born between 1943 and 1956) and retirement age phases up from there to 67 years for those born in 1960 and beyond.

Your full retirement age is when you can qualify to collect 100% of your benefit based on your earnings history. However, before you hit full retirement, if you earn more than the earnings cap and start to take Social Security, your benefits will be reduced. For example, in 2022, the earnings cap is $21,240, and the SSA will deduct $1 in benefits for every $2 earned above that limit, which can add up.

When you turn your full retirement age, you can work and receive benefits without any deductions from your Social Security check, regardless of whether you're working or how much you're earning.

If you can wait even longer to collect, you'll also avoid being penalized—plus your benefit will increase by as much as another 8% for each year you delay, up to age 70. At that point, your benefit maxes out and there is no further incentive to delay.

Advantages of Collecting Social Security While Working

There are a few benefits to collecting your Social Security benefits. If you are working a lower-wage job, collecting your Social Security benefits can help to supplement your income, even with the deductions. If you are able to work at your full-retirement age, you will be able to earn your full retirement benefits in addition to your salary, which may be useful.

Disadvantages of Collecting Social Security While Working

If you work and collect Social Security benefits before hitting your full retirement age, you will receive a reduced payment. In addition, if you earn too much, some of your Social Security benefit may be withheld until you reach age 66 or 67, depending on your birth year.

If you take Social Security payments plus a salary, you may pay higher taxes than if you only pulled an annual salary. Also, if you take Social Security early, you miss out on the chance to boost your benefit even more by waiting until age 70 to draw benefits.

How Social Security Calculates Your Benefit

The amount you receive in Social Security benefits is based on an average of your 35 highest-earning years. So if you're earning more now than ever before, your best bet is to keep working if possible, and delay receiving benefits until age 70. You'll then be eligible for your maximum benefit.

On the other hand, if you keep working but start taking benefits early, you may run up against the Social Security income limits. For 2023, Social Security will deduct $1 of every $2 you earn over $21,240 if you are under your full retirement age. During the year you reach full retirement age, it will deduct $1 for every $3 you earn over $56,520 until the month you reach full retirement age. After that, you'll receive your entire benefit.

Note that any money Social Security withholds from your benefit isn't lost forever. After you reach full retirement age, Social Security will recalculate your benefit and increase it to account for the benefits that were withheld earlier.

The Bottom Line

You can begin collecting Social Security benefits while you're still working, but your benefits will be reduced if you're younger than your full retirement age. If you're in that situation, it's worth estimating how much you expect to earn and how much that will reduce your benefit. Once you know how much you're likely to receive from Social Security, you can decide whether having that extra money now outweighs the advantages of waiting to claim benefits until later.