Drawing Social Security Early and Still Working? Here’s What You Need to Know.

Some people decide to retire early and start drawing Social Security early. Many people are unable to live out their retirement plans due to inadequate retirement savings. In addition, many are spending retirement working another job.

However, some people enjoy working and want to do so during retirement. It’s appealing to be able to work part-time or where you have an interest. Or even start a small business while making an income and receiving Social Security retirement benefits.

Early Retirement

While early retirement and a part-time job may be of interest to you, they can affect your Social Security Retirement benefits. If you aren’t at full retirement age. Your Social Security retirement benefits may be subject to taxes if your combined income, Social Security, and wages exceed a certain threshold. Combined income is your adjusted gross income plus one-half of your Social Security benefit plus any income earned from tax-exempt interest income. There is no age limit, including income from all sources, earned or unearned.

Often, retirees are confused about the impact of working in retirement. You can still collect Social Security benefits, but earning above a certain amount may reduce your monthly benefit. Here are a few things you need to know about working and drawing Social Security Retirement benefits:

  • If you are drawing benefits and you are younger than your full retirement age (FRA), Social Security will deduct $1 from your benefits for every $2 or $3 you earn above a certain amount.
  • After you reach full retirement age, Social Security will increase your benefits to account for the money it withheld earlier.
  • Earned income is income from work or self-employment and includes your salary, bonus, or net self-employment income.
  • Any benefits that reduce due to too much earned income are not truly lost and will be added to your benefit once you reach your FRA.

Source: What Income Reduces Social Security Benefits? Investopedia

Test Calculator

Use the Social Security Retirement Earnings Test Calculator to determine if you are at risk for reduced Social Security benefits if you continue working. Social Security can be confusing, and if you have any questions regarding your benefits, including when to claim them.  Contact your local Social Security Administration office to schedule a meeting.

Taking Benefits Early

Suppose you plan to take Social Security Retirement benefits early and continue to work. In that case, you can modify your financial plan to reflect how working may or may not benefit you. Once your financial professional has run your Social Security Retirement benefits and income scenario, you can make a more informed decision. Contact your financial professional today regarding how working in retirement may impact your situation.


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We specialize in providing strategies and guidance for those who are seeking a better lifestyle in retirement. Whether you have a retirement nest egg of five million dollars or $50,000, we can help you make sure it works as hard and as smart as you did in earning and saving it. At Carrio Financial Group, we know that it is your retirement, and you should have control over it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

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