Still Working at 65? Here's How That Affects Your Social Security

Many people assume that once they turn 65, it's time to start collecting Social Security. But the reality is more flexible and more nuanced than that. If you're still working at 65, here's what you need to know before making any decisions.

First, You Don't Have to Claim at 65

65 is no longer the "magic number" for Social Security. Full retirement age (FRA) is now 66 or 67, depending on when you were born. Claiming before your FRA means accepting a permanently reduced monthly benefit, sometimes by as much as 25 to 30%. If you're still earning a paycheck, waiting often makes more financial sense.

Working and Collecting at the Same Time? There's a Catch

If you claim Social Security before your full retirement age and you're still working, your benefits may be temporarily reduced. In 2025, if you earn more than $22,320, Social Security will withhold $1 in benefits for every $2 you earn above that limit. The good news: once you reach full retirement age, that penalty goes away and your benefit is recalculated upward to credit those withheld amounts.

After Full Retirement Age, the Rules Change

Once you've hit your full retirement age, you can work and collect Social Security with no earnings limit and no reduction in benefits. At that point, it becomes a straightforward question of cash flow and long-term planning.

Delaying Can Pay Off

For every year you delay claiming Social Security past your full retirement age, up until age 70, your benefit grows by about 8%. If you're healthy, still employed, and don't need the income right now, waiting could mean a significantly larger check for the rest of your life.

Don't Forget About Medicare

This is where 65 does still matter. Medicare eligibility begins at 65 regardless of when you claim Social Security. If you're covered by an employer health plan, you may be able to delay Medicare, but the rules depend on your company's size and coverage. It's worth reviewing before you assume you're covered.

The Bottom Line

Still working at 65 is increasingly common, and it can actually put you in a great position to maximize your Social Security benefit. The key is making sure your claiming strategy aligns with your overall retirement plan, not just a birthday on the calendar.

Not sure when the right time is for you to claim? That's exactly the kind of question we help our clients think through. Reach out to schedule a conversation.

Alpha Financial Management is a fee-only financial planner in Savannah, GA providing financial planning, retirement planning, and wealth management services for individuals, families, and business owners. As a fiduciary financial advisor, we provide independent guidance focused on helping clients build long-term financial confidence.