Quick Answer
There is no limit on how much additional income a person can earn while collecting Social Security retirement benefits starting at age 67. The Social Security Administration does not reduce benefits based on additional earnings once a person reaches full retirement age, which is currently 67 for anyone born in 1960 or later. So a 67 year old receiving Social Security can earn as much additional income from working as they want without affecting their Social Security benefit amount.
Earning Limits Before Full Retirement Age
While there are no limits on earnings for those who have reached full retirement age, the Social Security Administration does reduce benefits for younger beneficiaries if they earn over certain amounts.
For anyone under full retirement age, Social Security deducts $1 from benefits for every $2 earned over $19,560 in 2022. For the year an individual reaches full retirement age, Social Security deducts $1 from benefits for every $3 earned over $51,960 (in 2022) until the month the individual reaches full retirement age. Once full retirement age is reached, benefits are no longer reduced based on earnings.
So for those who claim benefits early while still working, benefits will be reduced if earnings exceed the annual limits. But at full retirement age, currently 67, there are no limits on how much additional income can be earned.
How Additional Earnings Affect Benefits Before and After Full Retirement Age
To illustrate how earnings can affect benefits before and after reaching full retirement age, here are some examples:
Example 1:
John claimed Social Security benefits at age 62 in 2022 while still working part-time and earning $24,000 per year. Because this is above the 2022 annual limit of $19,560, John’s benefits will be reduced by $1 for every $2 he earns over the limit, resulting in a $2,220 reduction in benefits ($24,000 – $19,560 = $4,440 excess earnings / 2 = $2,220 reduction).
Example 2:
Mary claimed benefits at age 65 in 2022 while still working full-time and earning $55,000 per year. This is above the 2022 limit of $51,960 for the year an individual reaches full retirement age. So Mary’s benefits will be reduced by $1 for every $3 she earns over the limit, resulting in a $1,013 reduction ($55,000 – $51,960 = $3,040 excess earnings / 3 = $1,013 reduction).
Example 3:
At age 67, Raul continues to work as a consultant earning $75,000 per year in addition to collecting Social Security benefits. Because Raul is now over full retirement age, there is no limit on his earnings and his Social Security benefits will not be reduced at all based on his work income.
So in summary, benefits are reduced when earnings exceed the limits before full retirement age, but there are no limits on earnings starting at age 67 currently.
Social Security Was Never Meant to Be a Person’s Sole Source of Retirement Income
It is important to understand that Social Security was designed to replace only about 40% of pre-retirement income. Most financial advisors say retirees need approximately 70-80% of their pre-retirement earnings to maintain their standard of living in retirement.
Social Security benefits alone are generally not enough for most people to rely on completely in retirement. The average monthly retirement benefit as of January 2022 is only $1,657. That’s why additional income streams are necessary for the majority of retirees to make ends meet.
Additional income can come from a variety of sources such as retirement accounts, pensions, annuities, rental properties, inherited assets, working part-time, monetizing a hobby, downsizing to reduce expenses, and more.
So a 67 year old continuing to work and earn as much as they desire while collecting Social Security is perfectly acceptable and even expected in many cases.
There Are Multiple Ways for Seniors to Earn Additional Income
Here are some of the most common ways for seniors to earn extra money in addition to Social Security once they reach full retirement age:
- Continuing to work full or part-time for an employer – Many seniors gradually transition to retirement by working reduced hours for the same employer or switching to a less demanding job.
- Consulting or freelance work – With extensive expertise and contacts, consulting is a lucrative option with flexible hours.
- Starting a small business – A business owner can work as much or as little as they want and build equity for additional retirement income.
- Monetizing a hobby or talent – Selling handmade crafts, writing a book, selling photos, or performing music are ways to generate income from hobbies.
- Renting out property – Rental income from a spare room, basement apartment, or other investment property can provide steady cash flow.
- Retail work – Working part-time for a retailer provides scheduled hours and employee discounts.
- Driving for a rideshare service – Picking your own hours driving for Uber or Lyft is convenient for retirees.
Seniors bring a lifetime of skills, knowledge, and expertise that makes continuing to earn additional income past full retirement age very feasible.
Factors That Determine How Much a Senior Can Earn
How much additional income a senior can realistically earn while collecting Social Security depends on several factors, including:
- Desired lifestyle – A more comfortable, travel-oriented lifestyle requires greater earnings than a budget-focused retiree.
- Cost of living – Those living in high-cost urban areas may need to earn more than seniors in rural towns.
- Debt levels – Retirees still paying off mortgages or other large debts will need higher earnings.
- Health status – Poor health prevents working and limits earnings potential.
- Caregiving responsibilities – Caring for a spouse or elderly parents reduces time available for earning income.
- Retirement account balances – Those with larger investment portfolios have greater flexibility to earn less.
Generally, the more affluent lifestyle a senior hopes to maintain, the higher their additional earnings need to be. Each person’s specific circumstances determine how much they need to earn.
Typical Additional Earnings Range for Many Seniors
While the amount of money a senior can realistically earn varies greatly based on individual factors, here is a general range that may be typical for many:
- No additional earnings – Some seniors are content to live only on Social Security and do not work at all. Their lifestyle aligns with modest Social Security payments.
- $5,000 – $15,000 per year – Working part-time, consulting occasionally, monetizing a hobby, or renting out a room generates a modest earnings range for many.
- $15,000 – $30,000 per year – This range allows a comfortable lifestyle for seniors who work 20-30 hours per week or have more lucrative side jobs.
- $30,000 – $75,000+ per year – Seniors still working full-time or who have highly profitable side businesses can earn a substantial income.
So while a broad range of potential earnings exists, many retirees find that an additional $15,000 to $30,000 per year beyond Social Security provides a healthy boost to maintain their preferred lifestyle. But there are certainly no limits, and six-figure earning is also possible.
Tips to Maximize Earnings Potential After Retirement
For seniors who want to earn as much extra income as possible during retirement while collecting Social Security, here are some helpful tips:
- Consider continuing to work full-time if you enjoy your job – Delaying full retirement maximizes current income.
- Consult for former employers or clients from your career – Leverage your hard-earned expertise and contacts.
- Move to a lower cost-of-living area – Housing, taxes and expenses are lower, meaning earnings don’t need to be as high.
- Be flexible and open to different types of work – Don’t limit yourself to just one option.
- Use retirement account withdrawals strategically – Only pull funds when needed to allow continued growth.
- Stay active and healthy – Good health enables higher earnings through working or lower costs.
- Consider relocating to a state with no income taxes – You’ll keep more of what you earn.
- Manage taxes efficiently – Use withdrawals, deductions and other tax strategies to maximize your after-tax income.
With some effort and creativity, many senior can substantially surpass the $15,000 to $30,000 per year in typical additional earnings. The possibilities are endless for generating income above and beyond Social Security once you reach full retirement age.
Benefits of Continuing to Work and Earn
There are many potential benefits beyond just financial rewards for seniors who continue earning income past retirement age while collecting Social Security:
- Maintain mental sharpness – Staying active and engaged at work keeps the mind stimulated.
- Continue social connections – Relationships with co-workers provide a valuable social outlet.
- Gain sense of purpose – Meaningful work provides fulfillment and keeps life exciting.
- Support healthier aging – Working helps keep body and mind active.
- Help society – Older workers offer experience and reliability to employers.
- Cushion against unexpected costs – Added income helps pay for surprise expenses.
- Allow more travel and leisure – The added funds enable more freedom to enjoy retirement.
- Ease adjustment to retirement – Phasing into full retirement by working part-time provides a bridge.
- Pass on knowledge and skills – Serve as a mentor to younger workers.
Working during retirement years can certainly boost finances, but also enhances quality of life in many other ways as well.
Risks of Continuing to Work While Collecting Social Security
Although there are many advantages to earning additional income while receiving Social Security after reaching full retirement age, there are also some potential risks to consider:
- Burnout from overwork – Working too many hours can lead to exhaustion and impaired health.
- Less family time – Staying busy with work could reduce availability for family interactions.
- Taxes on earned income – Additional tax obligations that eat into earnings.
- Reduced leisure time – Work commitments infringe on ability to enjoy hobbies.
- Job lock – Feeling trapped in a job mostly for the money.
- Impacts government benefits – Income could reduce eligibility for Medicaid, food stamps or other assistance.
- Higher household expenses – Costs for transportation, clothing, food, etc. associated with working.
- Employment instability – Age discrimination or layoffs resulting in job loss.
- Reduced retirement account withdrawals – Pulling less money from accounts could lead to depletion later.
Maintaining the right balance between work, leisure, health, and family commitments is key to avoid burnout when working during retirement. Consulting with a financial advisor can help address risks related to taxes, benefits, household expenses and retirement plan withdrawals.
The Future Outlook for Working During Retirement
Current trends indicate working during retirement will become even more common in the future for several reasons:
- Higher Social Security full retirement age – This will gradually rise to age 67 for anyone born in 1960 or later.
- Increasing lifespans – Longer average life expectancies will require more retirement savings.
- Fewer traditional pensions – The decline of guaranteed-benefit pensions puts more focus on individual savings.
- Stock market volatility – Unpredictable market returns make it harder to rely solely on investment income.
- More service industry and knowledge economy jobs – Many of these jobs are less physically demanding for older workers.
- Greater openness to older workers – Age discrimination is decreasing as employers face labor shortages.
The trend toward working later into life is expected to continue growing. But for those who wish to earn substantially beyond Social Security payments, the option to do so freely begins at age 67.
Frequently Asked Questions
What are the Social Security earnings limits for someone age 67?
There are no earnings limits for someone who has reached full retirement age, currently 67. A beneficiary who is 67 can earn any amount from work without any reduction in Social Security benefits.
What if I earn so much that my Social Security benefits get taxed?
Up to 85% of Social Security benefits are taxable for retirees who have substantial other earnings or investment income above certain thresholds – $25,000 single or $32,000 married filing jointly. The additional taxes would still usually leave you with greater total after-tax income.
Can I claim Social Security benefits at 62 and still work full-time?
Yes, you can claim reduced Social Security benefits as early as age 62 while continuing to work full-time. However, your benefits could be reduced significantly based on your earnings before you reach full retirement age.
What are some well-paying jobs I can do part-time in retirement?
Some examples of well-paying part-time jobs for retirees include consulting, tutoring, income tax preparation, bookkeeping, real estate agent, driver for rideshare services, online seller, and many others that leverage your expertise.
How much can I earn working online doing freelance work or running an ecommerce business?
Operating an online business allows retirees to earn as much as they want once they reach age 67, since Social Security benefits are not reduced after full retirement age no matter how much other income you generate. Successful online ventures can bring in six figures for industrious retirees.
Conclusion
Reaching full retirement age is a Social Security milestone, since benefits are no longer reduced regardless of earnings. Many seniors see continuing to work and earn as much as they desire as the recipe for an active, healthy and fulfilling retirement.
While each person needs to consider their own needs and circumstances, working past age 67 provides the advantage of boosting income without limit. For seniors who enjoy their work or want the financial means to support their preferred lifestyle, continuing to earn well into their retirement years is certainly feasible.