If you’ve already filed for Social Security benefits but are still under the full retirement age (FRA), you likely know that you’re receiving reduced payments.

Many people, in such circumstances, decide to take some consulting work on the side to increase their income; however, they’re often unsure how the income will affect their Social Security earnings limit. 

If you’re in the same boat, we’re here to help! Read on to understand how you can work part-time and also increase your Social Security payments in the long term. 

Does taking on a part-time job affect Social Security benefits?

Yes, the income from your part-time job will affect your Social Security, but it won’t mess up anything. In fact, it could help you increase your benefit over time. If you’re working part-time and receiving Social Security benefits, you likely know there’s an earnings limit. For 2022, the limit is $19,560. For every $2 over this limit, the Social Security Administration will withhold a total of $1 from your benefits. 

So, for instance, if your Social Security payout is $1,100 per month, and your new part-time gig pays you $36,000, this essentially equates to a sum of $8,220 [($36,000 – 19,560)/2] that will be withheld from your benefits. 

To withhold this sum, Social Security will withhold about 8 months’ worth of your benefits. If you continue to work at the same job and your earnings don’t change, this will continue till you reach your Full Retirement Age. If your FRA is 3 years from now, you’ll have a total of 24 months’ worth of benefits withheld. Once you reach your FRA, your benefits will be recalculated as if you filed for Social Security at a later age. The recalculated benefits will be substantially higher since you’ve been earning until your FRA. 

You may also have the option of a “do-over.” What this essentially means is that if you filed for Social Security benefits and had second thoughts about it within 12 months from the date of your original filing, you have another option available: You can withdraw your application entirely. Of course, you’ll have to repay all the benefits you received from Social Security. Once this is done, your record with Social Security will be wiped clean, and you can refile for the benefits at any time in the future.