You become eligible for Social Security at 62, and many Americans can't wait to sign up then. But just because you're eligible for checks doesn't mean you're ready to stop working.
The government allows you to work and receive Social Security checks at the same time. However, you could run into a few extra rules if you're doing this. Here are the three most significant things to watch for.
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1. Social Security earnings test
The Social Security earnings test withholds benefits from your checks if your income exceeds certain thresholds. This only applies to those who claim checks while under their full retirement age (FRA). This is 67 for most workers today.
In 2025, you lose $1 from your checks for every $2 you earn over $23,400 if you're under your FRA all year. If you reach your FRA in 2025, you only lose $1 for every $3 you earn over $62,160, assuming you earn this much before your birthday.
The earnings test could completely wipe out your Social Security benefit in some months, especially if you earn a high income. If you think this may happen to you, it's important to adjust your budget accordingly. You may need to rely more on your paychecks during this time.
The good news is that money lost to the earnings test comes back to you as a benefit increase at your FRA. The amount of the increase depends on how much you had withheld in the past. But it can be substantial, especially if you had entire checks withheld before.
2. Possible benefit increase
Your Social Security benefits are based on your average monthly income over your 35 highest-earning years. Those could change over time, as most people tend to earn more later in their careers than in their 20s.
If your income continues to rise while you're claiming Social Security benefits, you may see your checks increase annually beyond the standard cost-of-living adjustment (COLA) that all Social Security beneficiaries get.
Again, the exact amount of the increase will depend on how your income today compares to your income in the past. But for some people, it could make a significant difference to your monthly income.
3. Increased risk of Social Security benefit taxes
The federal government taxes the Social Security benefits of seniors whose provisional incomes -- adjusted gross incomes (AGIs), plus nontaxable interest from municipal bonds, and half their annual Social Security benefit -- exceed $25,000 for a single adult or $32,000 for a married couple. In some cases, you could owe taxes on up to 85% of your benefits.
To be clear, that doesn't mean you'd lose most of your checks. Instead, you'd owe ordinary income taxes on the taxable portion of your checks. However, that can still amount to thousands of dollars per year.
It's not always possible to avoid this, especially if you're still working. Your job and Social Security benefits will likely put you in the taxable range. This may not always be an issue if President Trump succeeds in ending Social Security benefit taxes as he hopes to.
But for now, you'll have to plan for benefit taxes so you're not caught off guard. You can do this by setting aside money yourself for taxes or by requesting that the Social Security Administration withhold money for taxes from your checks. Consult with a tax professional if you're unsure of how to best handle this.
If you have any questions about how these three things work or how they affect you specifically, reach out to the Social Security Administration for more information. You can contact them by phone or by visiting a field office near you.
