Working While Collecting Social Security: The Earnings Test

Many people continue working after they start receiving Social Security, whether part-time, seasonally or full-time. If you are younger than full retirement age, it is important to understand the retirement earnings test, which may temporarily reduce your benefits if you earn above certain limits.

How the earnings test works in 2026

If you are under full retirement age for the entire year:

Social Security deducts $1 from your benefits for every $2 you earn above $24,480.

In the calendar year you reach full retirement age:

Social Security deducts $1 for every $3 you earn above $65,160, counting only earnings before the month you reach FRA.

Starting the month you reach full retirement age:

There is no limit on how much you can earn. The earnings test no longer applies.

These limits are adjusted each year. For 2027, Social Security has announced that the under-FRA limit rises to $25,560 and the limit for the year you reach full retirement age rises to $67,920.

What counts as earnings

For the earnings test, Social Security counts:

• Wages from employment
• Net earnings from self-employment

It generally does not count:

• Pensions and annuities
• Investment income, interest and dividends
• Capital gains
• Other government benefits
• IRA or 401(k) withdrawals

Withheld benefits are not lost

This is the most commonly misunderstood part of the earnings test. Benefits withheld because of earnings are not gone forever. When you reach full retirement age, Social Security recalculates your benefit to give you credit for the months when benefits were withheld. Your monthly benefit will be higher going forward as a result.

An example

Suppose you are 63 in 2026, receiving benefits, and you earn $34,480 from a job, which is $10,000 above the limit. Social Security would withhold $5,000 of your benefits for the year ($1 for every $2 over the limit). Social Security typically withholds full monthly payments at the start of the year until the total is reached, rather than reducing each check slightly.

This example is simplified. Your actual situation may vary.

The special first-year rule

In the first year you retire, a special rule may apply. You can receive a full benefit for any month in which you earn under a monthly limit and do not perform substantial services in self-employment, regardless of your annual earnings. This helps people who retire partway through the year and earned a lot in the months before.

Report your earnings

If you are working and receiving benefits before full retirement age, you should give Social Security an estimate of your earnings for the year. Update the estimate if your earnings change significantly. This helps avoid overpayments that you would later have to repay.

Working can also increase your benefit

Social Security benefits are based on your highest 35 years of earnings. If you continue working and earn more than in one of your earlier years, your benefit may increase. Social Security reviews records each year and automatically adjusts benefits if your new earnings raise them.

Things to consider

• If you plan to keep working with substantial earnings before FRA, it may make sense to delay claiming.
• If you are self-employed, the rules for counting income can be more complex.
• Medicare Part B premiums are often deducted from your benefits, which may be affected if benefits are withheld.

Contact Social Security at 1-800-772-1213 or ssa.gov for questions about your specific situation.

Terrameritavi is an independent publication and is not affiliated with the Social Security Administration. This article is general information, not financial advice.