2025 Social Security Earnings Limit: How to Maximize Your Income and Benefit

Exploring the rules and implications of the 2025 Social Security earnings limit.

When planning for retirement, one of the most important factors to consider is how much you can earn while receiving Social Security benefits. Many retirees choose to continue working even after they start collecting Social Security, and it’s crucial to understand the earnings limits to avoid unexpected reductions in benefits.

For 2025, the Social Security earnings limit is $23,400 per year or $1,950 per month. If you are below full retirement age and earn more than these amounts, Social Security will withhold part of your benefits.

How the Social Security Earnings Limit Works

If you have not yet reached full retirement age (FRA) and your earnings exceed the $23,400 annual limit, Social Security will withhold $1 for every $2 you earn above that threshold. This means that if you continue to work and earn a higher income, you may see a temporary reduction in your Social Security benefits.

However, there’s also a monthly limit of $1,950 that applies under the “first year of retirement rule.” If you retire mid-year and have already earned more than the $23,400 annual limit, Social Security may apply the monthly threshold instead, meaning only the months after you retire will be used in the calculation.

Higher Limits the Year You Reach Full Retirement Age

The earnings limit increases in the year you reach full retirement age. In 2025, this limit rises to $62,160 for the year. Additionally, instead of withholding $1 for every $2, the reduction changes to $1 for every $3 earned over this limit.

Once you actually reach full retirement age (which varies based on your birth year), there are no limits on how much you can earn while receiving Social Security benefits. From that point forward, your earnings will not reduce your Social Security payments.

The Benefit Adjustment Once You Reach Full Retirement Age

One key benefit of working while collecting Social Security—even if your benefits are temporarily reduced—is that Social Security recalculates your benefit once you hit full retirement age. If benefits were withheld due to excess earnings, Social Security will adjust your monthly benefit upward to account for the months that payments were withheld.

This means that while working before full retirement age might result in temporarily reduced benefits, you won’t lose that money forever. Instead, you’ll gradually get it back in the form of a higher monthly benefit once you reach full retirement age.

Maximizing Your Social Security Benefits

If you’re considering working while collecting Social Security, it’s essential to plan ahead. Here are some key takeaways to help maximize your benefits:

• Know your full retirement age (FRA) – This determines when earnings limits no longer apply.
• Track your annual and monthly earnings – Stay below the limits if you want to avoid benefit reductions.
• Consider delaying Social Security – If you can, waiting until FRA or later can increase your benefits.
• Understand that withheld benefits aren’t lost – Any benefits withheld before FRA will be recalculated and added back in over time.

By being strategic about when you file for Social Security and how much you earn while collecting benefits, you can make informed decisions that help you maximize your retirement income.

Links:

• Sign up for Social Security: www.ssa.gov 
• Social Security and Work: How Much Can You Make in 2025? 
• Supercharge your Social Security Benefit with These 5 Tips 

Disclosures

Jeremy Keil, aka “Mr. Retirement” and Keil Financial Partners offer retirement planning services with a focus on retirement income and tax planning, Social Security and pension claiming decisions, health & life insurance analysis and estate planning strategies. Jeremy Keil and Keil Financial Partners using the trademark name “Mr. Retirement” recognizes that these are not an exhaustive list of all aspects of retirement but are important topics on the financial aspects of retirement planning.  The projections or other information generated regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Thrivent Advisor Network, LLC and its advisors do not provide legal, accounting or tax advice. Consult your attorney and/or tax professional regarding these situations.

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Thrivent and its financial professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional. Representatives have general knowledge of the Social Security tenets. For complete details on your situation, contact the Social Security Administration. Before investing, investors should carefully read the prospectus/summary prospectus. and carefully consider the investment objectives, risks, charges and expenses. All portfolio-level performance shown is hypothetical and for illustrative purposes only. Investor returns will differ from the results shown. The investment funds listed herein are not FDIC insured and shouldn’t be seen as a substitute for money market funds. Increases in interest rates can cause the prices of bonds in the portfolio, and thus. the fund’s share price, to decrease. All distribution yields shown are after all fund related expenses, but before ’s management fee.