Social Security is one of the few supplemental income sources during retirement that changes yearly for inflation. Deciding whether you should wait to receive Social Security benefits is essential. If you choose to start your benefits before your full retirement age, your benefits will likely be reduced at a fraction of a percent for every month before you reach the full retirement age. It might be better to wait until you reach full retirement age or delay it more to receive an increase in Social Security benefits. Not a reader? Scroll down to watch a video about Social Security. 

According to Social Security Administration, based on data from 2022, your full retirement age =
* 66 years and four months (if born in 1956) 
* 67 years for those born in 1960 and beyond.

Situation A
You want to stop working before retirement age & start receiving Social Security benefits:

Key Points:

  • You can apply for Social Security Benefits as early as age 62
  • If you apply before reaching your full retirement age, your benefits will be reduced by 6% per year or 0.5% per month (2022), and if you delay, it’s an 8% per year deferral credit or 0.67% per month. 

Some people decide to apply for Social Security benefits before reaching their full retirement age to get extra income to support their needs. The earliest you can use it is at age 62. However, suppose you decide to apply early. In that case, you will get a reduction on your Social Security income, and you will miss out on the additional earning increase you would receive if you apply after your full retirement age up to age 70 (see Table 1). If you start a job after receiving Social Security benefits, your benefit payments will be recalculated based on that year’s set income limits.

You will automatically enroll in Original Medicare (Part A and Part B) when you turn 65.

Table 1, 2020  What your Social Security reduction would be if you applied at age 62 compared to an increase at age 70

Social Security Administration: Starting Your Retirement Benefits Early, October 2020 Social Security Administration: Delayed Retirement Credits, October 2020


Click here to get more information on our Retirement Roadblocks Social Security sheet!

Situation B
You want to keep working and receive Social Security benefits.

Key Points:

  • You can work and receive Social Security benefits.
  • Your Social Security benefits will be reduced until you reach full retirement age. 
  • The maximum income you can earn to avoid an extra benefit reduction depends on how close you are to the full retirement age. If your income is above this limit, they will reduce your benefits until you reach full retirement age.
  • Double penalty – if you earn more than the income limit, apply before full retirement age.
  • There are no reductions if you work after you reach your full retirement age.

Can you work and receive Social Security benefits?

Yes, you can work and get Social Security benefits simultaneously. Social Security can give you the extra boost of income you need if your job doesn’t give you enough. However, there are income limits. They will deduct a certain amount from your benefits if you earn more than these limits. The income limits only apply to income from work, and it does not count for investments, annuities, pensions, or capital gains.

What are the Income Limits for 2022?

The Social Security Administration sets its income limits for people receiving Social Security benefits yearly. This is the amount you are allowed to earn without getting a reduction on your Social Security payments. If you make more than the limit ($19,560 in 2022), your benefits will be reduced (if you are younger than the retirement age). Luckily these reductions will be returned to you when you reach full retirement. The social security benefits are only withheld temporarily.

If you’re younger than full retirement age during all of 2022, they will deduct $1 from your benefits for each $2 you earn above $19,560. If you reach full retirement that year, the limit changes to $51,960 (2022). They will deduct $1 in benefits for every $3 you earn above the limit.

If you are older than full retirement and decide to work, you will receive your full benefits; there are no income limits.

For more examples, visit
*note: there are different rules if you work outside the country or are on disability.

You will automatically enroll in Original Medicare (Part A and Part B) when you turn 65. Check before signing up for Medicare Part B if you or your spouse are still covered under an employer-provided group health plan.

Situation C
You want to keep working and not receive your retirement benefits yet.

Key Points:

  • If you decide to keep working and not start your benefits until after your full retirement age, your benefits will increase for every month you do not receive them until you reach the age of 70.
  • Delaying can also increase your benefits because your current earnings could replace an earlier year of lower or no wages.
Delaying your benefits can leave you with more money in the end. If you go back to table 1, you can see that if you apply at age 70, the extra benefits you will receive are up to 33% higher than if you apply before or at full retirement age. 
You will need to enroll in Original Medicare (Part A and Part B) three months before you turn 65 to avoid any penalties if you don’t receive your Social Security benefits when you turn 65
Fill out your email below and receive Social Security Highlights & Strategies

Social Security Pager

Want to learn more?

Feel free to schedule a meeting with one of our licensed financial planners if you need help deciding when to apply for social security benefits or retirement planning in general; identifying goals and objectives is key to a successful retirement.