Can I Draw Full Benefits From Social Security at the Age of 66 and Keep Working?

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You can draw full benefits from Social Security and still work once you reach the full retirement age established by the Social Security Administration based on the year you were born. Only those born between the years 1943 and 1954 reach full retirement age at 66, with the retirement age increasing 2 months for each year after that until the 1960 birth year. Anyone born in 1960 or later reaches full retirement age at 67.

Retirement Age

In the calendar year that you reach your full retirement age, you can earn up to $41,800 without penalty prior to your retirement. For every $3 earned above that limit, the Social Security Administration deducts $1 from benefits, but the agency only counts the months prior to retirement beginning with January of your retirement year. The Social Security applies a special rule for the year in which you reach full retirement age, if your earnings are over the limit for the year. The rule allows the agency to pay a full benefit check for the whole month it counts you as retired, as long as the earnings in that month don’t exceed $3,490.

Early Retirement

If you decide to take an early Social Security retirement, you can still collect retirement benefits, but they are reduced by a specific percentage based on your age and the date you reach full retirement age. If you retire in 2015 at age 62, for example, and your full retirement age is 66, you receive 75 percent of the retirement benefit that you would get at 66, because early retirement at 62 allows you to receive your benefits longer. But if your full retirement age is 67, and you take early retirement at 62, you receive a 30 percent reduction compared with the full benefit amount.

Early Retirement Maximum Earnings Amount

If you retire at age 62 in 2015, the maximum net amount you can earn and still collect Social Security without a reduction in your benefits is $15,720, which increases each year by the cost of living amount the agency adopts. For any amount over that annual figure, the Social Security Administration deducts $1 for every $2 that exceeds that annual limit. For example, if you’re entitled to $1,000 a month at age 62, but also make $1,500 a month, you’ve exceeded the monthly limit set at $1,310 for 2015 by $190 per month. The Social Security administration reduces your monthly amount from $1,000 to $905 per month or $95. Once you reach full retirement age, your monthly Social Security benefit is recalculated based on your total earnings.

Working While Retired

Once you reach full retirement age, the income you make no longer reduces the benefit amount you receive – regardless of how much you earn. The Social Security Administration reviews the records for all those who receive Social Security benefits each year. If the income you made in that year is higher than any of the years the agency used to calculate your monthly benefit amount, it recalculates the amount. The agency pays the increase the year after you earned the month – retroactive to January of that year.