Earnings Limit for Beneficiaries Under the Full Retirement Age

Social Security rules limit the amount of earnings a worker can make while maintaining full benefits. In 2022, workers under full retirement age (FRA) who receive Social Security benefits and earn above $19,560 face some reduction in benefits. Benefits are reduced by $1 for every $2 earned over that threshold. Workers who receive reduced benefits because of the earnings limit will receive increased benefits once they reach the FRA. On average, over a person’s lifetime, the increase in benefits will offset the reduction due to the earnings limit. 

Some policymakers advocate raising or eliminating the earnings limit for those younger than the FRA. This could induce some individuals who have already claimed Social Security benefits early to remain in the workforce. Or they might work additional hours. It could persuade workers between age 62 and FRA to begin claiming Social Security benefits because there is no longer a penalty for receiving benefits while working.