For decades, retirement in America meant one thing — stepping away from the workforce and finally putting your feet up. But in today’s world, that picture looks a little different. More and more older adults are collecting Social Security while continuing to work — whether it’s part-time, freelancing, consulting, or turning a lifelong passion into a paycheck. Some do it because they love what they do. Others, because everyday costs just keep climbing.
But here’s the catch: if you start collecting Social Security before hitting your full retirement age (FRA), your benefits might temporarily shrink if you earn too much. The key word here is temporarily — that money isn’t gone for good, it’s just delayed. And starting in 2026, those limits will loosen up a bit, letting you earn more before any deductions kick in.
The Rules as They Stand in 2025
Right now, once you reach full retirement age, you can work as much as you like without any reductions — your benefits are safe no matter how big your paycheck gets.
But if you’re under FRA and still working, the Social Security earnings test determines how much you can make before the SSA starts withholding part of your benefit.
| Scenario | 2025 Earnings Limit | Reduction Rule |
|---|---|---|
| You will not reach FRA in 2025 | $23,400 | Lose $1 in benefits for every $2 earned above the limit |
| You will reach FRA in 2025 | $62,160 (applies only until the month you reach FRA) | Lose $1 in benefits for every $3 earned above the limit |
It sounds tough, but it’s not permanent. Once you reach FRA, the SSA recalculates your monthly benefit to credit back the amount that was withheld earlier. In other words, you eventually get it all back — just spread out over time.
Still, for anyone relying on steady monthly income, those withheld checks can sting in the short run, especially if you accidentally cross the earnings line midyear.
What’s Changing in 2026
The earnings test isn’t disappearing, but the income limits are getting a small bump next year to keep pace with inflation and wage growth.
The Social Security Administration (SSA) usually announces updated figures every October along with the annual Cost-of-Living Adjustment (COLA). Based on current estimates, here’s what 2026 will likely look like:
| Scenario | Projected 2026 Limit | Change From 2025 |
|---|---|---|
| Below full retirement age for all of 2026 | $24,360 | +$960 |
| Reaching full retirement age during 2026 | $64,800 | +$2,640 |
That’s roughly $1,000 more flexibility for those still under FRA and about $2,600 more for those hitting it during the year. It might not sound like a huge win, but for retirees earning side income — driving for Uber, tutoring, or working seasonal retail jobs — that extra space can keep hundreds of dollars in benefits from being withheld.
How the Withholding Really Works
The SSA doesn’t take your benefits dollar-for-dollar as you earn. Instead, it looks at your expected annual income and withholds the appropriate amount early in the year — usually by skipping one or two checks.
Here’s an example:
Let’s say you’re 64 in 2026 and expect to earn $30,000 from part-time work.
- The limit is $24,360 — meaning you’re $5,640 over.
- You’ll lose $1 in benefits for every $2 over the limit — about $2,820 withheld.
That could translate to missing one or two monthly payments at the start of the year. But once you hit your full retirement age, the SSA automatically raises your monthly benefit slightly to make up for those withheld checks.
It’s not a fine, and it’s not a tax — it’s more like a temporary adjustment.
Why These Rules Exist
This part of Social Security has always caused confusion — and sometimes frustration. The earnings test wasn’t created to punish workers; it’s designed to keep things fair.
Here’s why: people who claim Social Security early (as young as 62) receive smaller monthly payments for life. The earnings test ensures that those early claimers who continue working don’t end up collecting more overall than those who waited until full retirement age to claim.
In simple terms, it’s the system’s way of balancing early and delayed benefits so everyone plays by the same rules.
Planning Ahead for 2026
If you’re planning to work while collecting benefits next year, a little foresight can go a long way. Here’s how to stay ahead of the game:
- Estimate your earnings early. Use last year’s income as a guide so you don’t accidentally cross the limit.
- Keep the SSA updated. If your income changes midyear, report it — they can adjust your withholdings in real time.
- Time your claim smartly. Waiting even a few months to claim can permanently boost your monthly check by 5–8%.
- Pay attention to your birthday month. Once you hit FRA, there’s no limit — you can earn freely.
- Use your “My Social Security” account. The online portal at SSA.gov lets you check your FRA, estimate benefits, and review payment history anytime.
Full Retirement Age (FRA): Where It Stands Now
Your full retirement age depends on your birth year. For most people approaching retirement now, it’s inching closer to 67.
| Birth Year | Full Retirement Age |
|---|---|
| 1954 or earlier | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
If you were born in 1960 or later, 67 is your magic number — the point where you can work as much as you want without losing a cent of your benefits.
FAQs
Will my benefits disappear if I earn too much before FRA?
No. The SSA only withholds part of your payments temporarily. Once you reach full retirement age, your monthly check increases to compensate for what was withheld.
How do I find out my full retirement age?
You can check it directly through your “My Social Security” account or use the chart above — if you were born in 1960 or later, it’s 67.
When will the 2026 limits be confirmed?
Expect an official announcement around October 2025, when the SSA reveals the new COLA and updated income limits.
Retirement isn’t about stopping — it’s about shifting gears. Whether you’re teaching part-time, consulting from home, or just keeping busy, knowing how the Social Security earnings test works can help you make the most of your hard-earned benefits. And with higher limits coming in 2026, that balance between work and retirement might get just a little bit easier.