Dear Rusty: I opted to draw my Social Security retirement benefit early and work part time. The company I work for has decided to pull me from field work due to my age and health. Although they are great keeping me at 20 hours per week running for parts and doing office work, I’m not sure how much longer it will last. I’m thinking of taking a taxi driving job to keep my income enough to live on. The way it would work, I would lease the cab for some amount of dollars per day, set my own hours to work and collect anywhere from $1.40 to $4.00 per mile, depending on what type of fare. My question is: how does Social Security look at that type of employment? Would I be held to the 15 - 45 hours a month standard? I could never come close to making the $1,200 to $1,300 a month I need by working so little. Any advice is greatly appreciated. Signed: Seeking Advice Dear Seeking: If you go ahead with your plan to lease a taxicab instead of continuing your current employment, you would, in effect, be considered “self-employed” and would submit your income tax return to the IRS accordingly. Social Security would get your earnings information as reported to the IRS, and it would be your net earnings from self-employment (after deducting all your business expenses) that is reported to SSA by IRS. There is, however, a special rule which would apply to you in your first calendar year of self-employment while collecting early Social Security benefits. Since, in your first year, some of your earnings would be as a part-time employee paying SS FICA payroll taxes, Social Security would first look at your earnings as an employee to see if you exceeded the annual earnings limit ($23,400 for 2025). Then, upon starting your self-employment, Social Security would look at the hours you spent performing “substantial gainful activity” (e.g., driving your taxi) each month and, if you spent more than 45 hours per month in that capacity, you would not be considered “retired,” and thus, not eligible for Social Security in any month you exceeded that amount of hours. If you earned less than the annual limit in total (both as an employee and while self-employed), you would get benefits for all months of the year. But if you earn more than the annual limit, you will get no benefits for any month you exceeded 45 hours as a self-employed person. Again, this only applies during the first calendar year of self-employment in the following year only your net earnings from self-employment would count toward the annual earnings limit.
