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By AMAC Certified Social Security Advisor Russell Gloor, Association of Mature American Citizens

Dear Rusty: I am 65 and currently working full-time. Can I apply for and start receiving my Social Security benefit? I’d expect to have to pay income tax on it if/when I do. Signed: Curious Worker

Dear Curious Worker: If you are working full time, you should likely delay claiming Social Security at this time. At age 65, you haven’t yet reached your Social Security full retirement age (FRA), so you will be subject to Social Security’s “annual earnings test” which limits how much you can earn from work while collecting early benefits. The earnings limit for 2025 is $23,400 and if you earn more than the annual limit, Social Security will take away $1 in benefits for every $2 you are over the limit. If you earn significantly over the limit, you may even be temporarily ineligible to collect Social Security benefits. FYI, the annual earnings limit goes away when you reach your full retirement age, which for you is 66 years and 10 months, or March 2026.

As you obviously already know, a portion of your Social Security may be subject to income tax after you start collecting. The threshold for taxation of Social Security benefits depends on your IRS filing status – if you file your taxes as a single and your combined income from all sources (including half of the Social Security benefit you received during the tax year) exceeds $25,000 then 50% of your received Social Security benefits are taxable. But if you file taxes as “married/jointly” and your combined income is over $32,000, then up to 85% of your received Social Security benefits are taxable. Thus, whenever you claim Social Security, you may wish to consider having income tax withheld from your Social Security benefit. This is optional, and you can do this by submitting IRS Form W-4V to your local Social Security office, or you could choose to increase your income tax withholding at work or, alternatively, pay estimated income taxes quarterly.

So, whether you can claim Social Security now depends entirely on how much you will earn from working full time prior to your FRA. If you exceed the annual earnings limit before your FRA, Social Security will take away some of your benefits or, if you greatly exceed the earnings limit, you may even be temporarily ineligible to get benefits (until you either reach your FRA or earn less). But note, if you decide to claim early and any Social Security benefits are withheld because you exceeded the earnings limit, you will get credit for that (in the form of a slightly increased benefit) after you reach your full retirement age.

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