How does returning to work impact Social Security Benefits?

If you have started taking Social Security benefit payments, they may be reduced if you begin making income again. The key to determining whether and how your Social Security payments will be affected depends on whether you have reached full retirement age (FRA).

Full Retirement Age (FRA) Chart

If you have not reached FRA but have started receiving benefits, you may be subject to deductions from your benefits.

• Before you reach FRA, $1 of Social Security benefits will be deducted for every $2 you earn in income above the annual limit ($24,480 in 2026).

• In the year you reach FRA, $1 in Social Security benefits will be deducted for every $3 you earn above a higher annual limit ($65,160 in 2026).

• Beginning the month you reach FRA, your benefits are no longer reduced- no matter how much income you earn.

If you have already started drawing Social Security benefits and have not reached FRA, this is an important thing to consider when thinking about going back to work, as you may have less total income than you anticipated if your Social Security benefits are reduced.

What is the impact on my Retirement Savings (Traditional or Roth IRA, 401(k), Pension)?

If you receive a pension, it may be affected by returning to work. Plans vary, so it is best to check with your plan provider to get the most accurate answer. This can be even more important if you are returning to work for the same employer that provides your pension.

One advantage to continuing to work later in life is that you can continue to contribute to your employer’s qualified retirement plan or an IRA if you have earned income.

Should you return to work?

The answer can be complex, and it is a personal decision that might not be based solely on finances. The key is to understand the impact going back to work can have and make an informed decision that is best for you.