Quick Answer
Yes, you can collect Social Security benefits at age 66 and still work full time. There is no limit on how much you can earn if you start receiving benefits at full retirement age, which is 66 for people born between 1943 and 1954.
Can I Collect Social Security Benefits and Still Work Full Time?
The short answer is yes. Once you reach your full retirement age (currently 66), you can work and earn as much income as you want without reducing your Social Security benefits.
Prior to your full retirement age, your benefits will be reduced by $1 for every $2 you earn over the annual limit, which in 2023 is $21,240. But this reduction no longer applies once you reach full retirement age.
Key Points on Working and Collecting Social Security at 66
- You can earn any amount once you reach full retirement age and it will not affect your Social Security benefits.
- Benefits are no longer reduced due to earnings once you hit full retirement age.
- You can work full-time, part-time, or be self-employed with no limit on income.
- Your monthly benefit amount will be the full amount you are entitled to based on your lifetime earnings record.
So in summary, yes you can work as much as you want and earn as much as you want once you reach age 66 without worrying about reductions in your Social Security retirement benefits.
How Does Social Security Calculate Your Benefit Amount?
Your Social Security benefit amount is based on your average monthly earnings over your 35 highest paid years of work. When you start receiving benefits, the Social Security Administration calculates your basic benefit, or “primary insurance amount,” using a formula that accounts for your earnings history.
This primary insurance amount is the monthly benefit you would receive if you start collecting at your full retirement age. So at 66, your benefit would be this full retirement amount. It does not matter if you are working – your benefit is fixed based on your earnings record.
Factors Determining Your Benefit Amount
- Your average monthly income over your 35 highest paid years
- The age you start receiving benefits
- Whether you were born before or after the above breakpoints that determine full retirement age
So once again, this amount is not impacted by your current work income after you reach full retirement age.
Are There Any Reasons Working Could Impact My Benefits at 66?
There are a couple special cases where working could impact your benefits at full retirement age:
You are Still Earning “Credits”
– Social Security benefits are based on how many “credits” you earn from your earnings history.
– You can earn a maximum of 4 credits per year.
– If you are still earning credits after filing for benefits at 66, your benefit could increase because it will be recalculated to account for these new credits.
You Started Benefits Before Full Retirement Age
– If you started benefits early, before 66, your benefits were reduced.
– Once you reach full retirement age, this reduction is eliminated.
– Your monthly benefit will increase to your full primary insurance amount.
Aside from these scenarios, your Social Security benefit at 66 is not impacted by working full time. The only consequence could be paying higher taxes if half your benefits plus other income exceeds $25,000 (single) or $32,000 (married).
Can I Change My Mind and Stop Benefits if I’m Working Full Time?
Yes, you can change your mind and withdraw your application for Social Security benefits at any point up to the first 12 months after you start receiving benefits. You are allowed one free withdrawal per lifetime. You would have to pay back any benefits received so far.
After the first 12 months, you cannot withdraw your application. So if you want to continue working full time and delay Social Security, it’s best to not sign up for benefits right at 66 in the first place.
But again, there is no penalty or benefit reduction for working full time once you reach age 66. It won’t impact the amount you receive each month.
Conclusion
In summary, yes you can work full time and earn as much as you want once you reach full retirement age at 66 without any cuts to your Social Security retirement benefits. The key points to remember are:
- Benefits will not be reduced no matter how much you earn from working.
- Your benefit is fixed based on your lifetime earnings record.
- Higher earnings could increase future benefits if you continue earning credits.
- Withdrawing and reapplying is an option within the first 12 months if you change your mind.
Just be aware that additional income above certain thresholds could make your benefits partially taxable at the federal level. But the benefits themselves will not be cut if you work full time at or after age 66.