Will Earning Wages While on Social Security Affect Your Benefits?

Below is an excerpt I found from the Social Security Administration website which answers this question:

How much can you earn and still get benefits?

If you were born January 2, 1943, through January 1, 1955, then your full retirement age for retirement insurance benefits is 66. If you work and are full retirement age or older, you may keep all of your benefits, no matter how much you earn. If you are younger than full retirement age, there is a limit to how much you can earn and still receive full Social Security benefits. If you are younger than full retirement age during all of 2011, we must deduct $1 from your benefits for each $2 you earned above $14,160.

If you reach full retirement age during 2011, we must deduct $1 from your benefits for each $3 you earn above $37,680 until the month you reach full retirement age.

These examples show how the rules would affect you:

Let us say that you file for Social Security benefits at age 62 in January 2011 and your payment will be $600 per month ($7,200 for the year). During 2011, you plan to work and earn $20,480 ($6,320 above the $14,160 limit). We would withhold $3,160 of your Social Security benefits ($1 for every $2 you earn over the limit). To do this, we would withhold all benefit payments from January 2011 to June 2011. Beginning in July 2011, you would receive your $600 benefit and this amount would be paid to you each month for the remainder of the year. In 2012, we will pay you the additional $440 we withheld in June 2011.

Or, let us say you were not yet full retirement age at the beginning of the year, but reach it in November 2011. You earned $39,000 in the 10 months from January through October. During this period, we would withhold $440 ($1 for every $3 you earn above the $37,680 limit). To do this, we would withhold your first check of the year. Beginning in February 2011, you will receive your $600 benefit, and this amount will be paid to you each month for the remainder of the year. We would pay you the remaining $160 dollars in January 2012.

I was able to find this information at Social Security Reference Article