The Social Security Administration rewards those Americans who wait to claim retirement benefits and keep on working.
What happens to your Social Security benefits if you decide to work longer?
Americans are waiting longer to begin claiming Social Security benefits with the average age increasing from 63.6 in 2005 to 65.2 in 2024 reports The Motely Fool. That is still below full retirement age, which is 67 for anyone born in 1960 or later.
This is due to Americans dealing with increased cost of living and annual COLA increases not keeping pace with inflation notes the financial outlet. Additionally, they reduce the penalty for claiming benefits before full retirement age, which decreases the amount they will be entitled to each month permanently.
While it is possible to start receiving Social Security retirement benefits at 62, opting to defer the payments will get you a larger monthly payment when you do decide to claim the support.
For those that wait to claim their retirement benefits after full retirement age can see their monthly benefit get an additional boost of 8% per year. However, once you reach 70 years old, the monthly Social Security payment stays the same.
While this looks a tempting offer, there are a host of other factors to consider before retiring, such as health and family time. As the US life expectancy was 79 years old in 2024, having less than a decade to truly enjoy your golden years may deter some.
Take a summer financial check-in.
— Social Security (@SocialSecurity) July 14, 2026
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What about working and receiving benefits at the same time?
It is possible to receive your benefits and hold down a job at the same time, though there are limits. Exceeding these begins to eat into the benefits received. If you are under the age of 67, the annual earning limit is $24,480 per year in 2026.
If you earn over this threshold, the SSA will reduce your benefits payments by $1 for every $2 you earn over it.
If you will reach full retirement age in 2026, the limit on your earnings before penalties will be $65,160. If you earn over this limit after reaching full retirement age, the SSA deducts $1 in benefits for every $3 you earn above the threshold. However, this only counts earnings before the month you reach your full retirement age.
Only the wages you make from your job are your net earnings if you’re self-employed are counted as earnings. This means a lot of money that seniors would usually rely on are exempt from this cap, including pensions, annuities, investment income amongst others.
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