The decision to claim Social Security benefits at age 62 while continuing to work full-time is a common one, especially as many Americans rely on these payments to supplement their income. The Social Security Administration (SSA) allows both simultaneously, but there are financial implications to consider.
Early Benefits and Income Limits
If you begin receiving Social Security before your full retirement age (66 or 67, depending on your birth year), the SSA reduces benefits if your income exceeds certain limits. As of 2025, the limit is $23,400. For every $2 earned above this threshold, $1 in benefits is withheld.
For example, if your monthly benefit is $600 (or $7,200 annually), and you earn $25,000, the SSA would deduct $800 from your total benefits.
Recouping Withheld Benefits
The good news is that these withheld benefits are not lost forever. Once you reach your full retirement age, the SSA recalculates your benefit amount, factoring in your additional earnings. This recalculation can lead to a permanently higher monthly payment.
Why This Matters
Understanding these rules is crucial for long-term financial planning. Delaying benefits to avoid income limits can maximize immediate gains, but it also means foregoing payments for longer. The optimal strategy depends on individual circumstances, including health, job stability, and financial needs.
Ultimately, while working and collecting Social Security simultaneously is permitted, careful planning is essential to minimize lost benefits and maximize long-term financial stability.
