1. The Earnings Limit in 2025

If you’re collecting Social Security before reaching your full retirement age (FRA), there’s a limit to how much you can earn from working without having some of your benefits withheld.

• For 2025, the annual earnings limit is $23,400, or $1,950 per month.
• If you earn more than that, $1 will be withheld from your benefits for every $2 you earn above the limit.
• In the year you reach your full retirement age, the limit jumps to $62,160, with just $1 withheld for every $3 earned over that threshold.
• Once you hit full retirement age, there’s no earnings limit—you can earn as much as you want with no reduction in benefits.

It’s important to note that only earnings after you start collecting Social Security count toward this limit.

2. The Social Security Wage Base

For 2025, the Social Security wage base is set at $176,100. This is the maximum amount of earned income subject to Social Security tax.

Here’s how the payroll tax breaks down:

• 6.2% of your wages goes to Social Security
• 1.45% goes to Medicare
• Employers match both contributions, totaling 15.3%

Any income you earn over the wage base is only subject to the Medicare tax (1.45%, plus an extra 0.9% for high earners).

If you earn above the wage base, you might notice your take-home pay increase later in the year once you stop paying Social Security tax.

3. Maximum Social Security Benefits in 2025

Your monthly benefit amount depends on when you claim and how much you earned during your 35 highest-earning years.

Here’s what the maximum monthly benefit looks like in 2025:

• $2,710 if you start at age 62
• $4,018 at full retirement age (typically 66–67)
• $5,108 if you delay benefits until age 70

Keep in mind, these maximums apply only to individuals who consistently earned the maximum taxable wage over a 35-year career.

There’s also a family maximum, which ranges from 150% to 180% of the primary earner’s benefit. This includes benefits for spouses and children.

4. Provisional Income and Social Security Taxation

Not all of your Social Security income is tax-free. The amount subject to federal taxes depends on something called provisional income—which includes your:

• Adjusted gross income
• Tax-exempt interest
• 50% of your Social Security benefits

Here’s how it breaks down in 2025:

For Single Filers:

• Under $25,000: 0% of benefits taxed
• $25,000–$34,000: Up to 50% of benefits taxed
• Over $34,000: Up to 85% of benefits taxed

For Married Couples Filing Jointly:

• Under $32,000: 0% taxed
• $32,000–$44,000: Up to 50% taxed
• Over $44,000: Up to 85% taxed

These thresholds are not indexed to inflation, which means more people may see their benefits taxed each year as income levels rise.

5. Understanding Bend Points and How They Affect Your Benefits

Social Security benefits are calculated using a formula that applies different percentages to portions of your average monthly earnings. These breakpoints are called bend points.

In 2025, the bend points are:

• 90% of the first $1,226 of average monthly earnings
• 32% of earnings between $1,226 and $7,391
• 15% of earnings above $7,391

This system is designed to replace a larger percentage of income for lower earners and a smaller percentage for high earners.

If you’re transitioning to part-time work before retirement, even modest earnings can have a favorable impact on your final benefit calculation—so these bend points are worth watching closely.

The Bottom Line

Understanding these five Social Security numbers can help you make smarter choices about when to claim benefits, how much you can earn, and how to reduce taxes on your retirement income.

Whether you’re still working or already retired, staying informed about these changes each year is one of the best ways to protect and optimize your benefits.

You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.

Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost.

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