How Much Can I Earn In 2022 and Still Collect Social Security?

Presenting Ideas To a Group stock photo
SolStock / iStock.com

Working while you are retired can make a difference in boosting your income and is a good way to fill your days. And having a job, even a part-time one, often helps with the transition from worker to retiree. However, there is a limit to what older workers can make and still receive full Social Security benefits.

See: Can I Draw Social Security At 62 and Still Work Full Time?
Find: Looking To Diversify In A Bear Market? Consider These 5 Alternative Investments

According to the Social Security Administration, you are considered retired once you begin receiving Social Security retirement benefits. Upon reaching full retirement age — 66 or 67 depending on if you were born before or after 1960 — you don’t have to worry about work earnings affecting your benefits. That’s one of the bonuses of waiting: You can earn as much as you want without the penalty of having your Social Security income withheld.

If you’re under the full retirement age, however, the annual earnings limit is $19,560 for 2022. If you earn more than this, the SSA will deduct $1 for every $2 you have earned above the limit.

Retire Comfortably

In the year that you reach the age of full retirement, the deduction will be $1 for every $3 you earn above the limit. In 2022 the limit stands at $51,960. The earnings calculation is made up to the month before the month you reach retirement age, not your total yearly earnings.

The SSA gives examples to illustrate both scenarios.

Say you are younger than the full retirement age for a full year and are due to receive $800 a month, or $9,600 per year, in benefits. If you work and earn $29,560, which is $10,000 over the $19,560 limit, your Social Security benefits would be reduced by $5,000 — $1 for every $2 over the limit. So, you would receive $4,600 of your $9,600 in benefits for the year.

Using the same hypothetical benefit amount, say you reach full retirement age in August, and you make $63,000 during the year, with $52,638 of it in the seven months from January through July. That would be $678 over the $51,960 limit. Your Social Security payments would be reduced by $226 in January through July — $1 for every $3 you earned above the limit.

Come August, when you reach full retirement age, you would receive your full benefit regardless of what you earn.

Retire Comfortably

When the SSA calculates how much to deduct from your benefits, it counts the wages you make from your job or, if you are self-employed, your net profit, including bonuses, commissions and vacation pay. It doesn’t count pensions, annuities, investment income, interest, veterans benefits or other government or military retirement benefits, according to the SSA’s “How Work Affects Your Benefits” publication.

Discover: 10 Best Countries To Live on Just a Social Security Check
Explore: 22 Side Gigs That Can Make You Richer Than a Full-Time Job

It should be noted that the benefits you lose when you are under full retirement age are not lost completely. You’ll receive previously withheld benefits after you reach your full retirement age. However, drawing Social Security benefits early means lower benefits later in life.

More From GOBankingRates

Share This Article:

About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.

Best Bank Accounts of August 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.