Reduction in retirement benefits if you work

If you are younger than full retirement age during all of 2009, Social Security must deduct $1 from your benefits for each $2 you earned above $14,160. It is presumed your full retirement age is 66.

Let us say that you begin receiving Social Security benefits at age 62 in January 2009 and your payment is $600 per month ($7,200 for the year). During the year, you work and earn $20,480 ($6,320 above the $14,160 limit). Social Security would withhold $3,160 of your Social Security benefits ($1 for every $2 you earn over the limit).

See here for details : http://www.ssa.gov/pubs/10069.html