Retirement isn’t always the full stop people imagine. For many older adults, the idea of working a little after they retire—whether to ease financial stress or just for something to do—feels more like a fresh chapter than an end. But for those collecting Social Security before reaching full retirement age, there’s a key rule to understand: the Social Security earnings test.
Let’s break it down in simple terms, so you can decide how working in retirement fits into your plan—without getting caught off guard by surprise benefit withholdings.
Table of Contents
Basics
When you start receiving Social Security benefits before full retirement age (which is 67 for anyone born in 1960 or later), there’s an earnings limit. If you earn more than that amount, the Social Security Administration (SSA) will withhold part of your monthly benefit.
This rule is what’s known as the Social Security earnings test. It doesn’t mean you lose money permanently. But it does mean you might see smaller checks in the short term if your income goes above the annual limit.
Withholding
Here’s where many people get confused. When SSA withholds benefits, you’re not losing them forever. Think of it more like a delay.
Let’s say you start benefits at 63 and take a part-time job that pushes your income over the annual limit. SSA will temporarily reduce your monthly benefit. But once you hit full retirement age, SSA will recalculate your benefit and increase future payments to make up for what was withheld.
Important: This is separate from the permanent reduction you get for claiming early. That part is locked in. But any withholding due to the earnings test? That gets paid back, just spread out over time.
Limits
The good news? In 2026, the earnings limit is increasing. That means retirees will be able to earn more money without triggering a reduction in their Social Security checks.
Here’s a look at how the test works in 2026:
| Year | Earnings Limit (Under FRA) | Amount Withheld |
|---|---|---|
| 2026 | $22,320 (example) | $1 for every $2 over the limit |
If you’re in the year you reach full retirement age, there’s a higher limit, and the withholding drops to $1 for every $3 earned above the threshold.
This increase in the limit opens the door for seasonal work, consulting gigs, or part-time jobs that would have been too risky under older rules. Now, you can earn more before SSA steps in to withhold anything.
Strategy
Here’s something a lot of people miss: even modest earnings in retirement can improve your Social Security benefit long-term.
Social Security calculates your benefit based on the 35 highest earning years in your work history. If you have less than 35 years of reported income, SSA fills in the blanks with zeroes.
That means every new year of work—even with a small paycheck—has the potential to replace a zero. That can boost your average earnings and increase your benefit permanently once it’s recalculated.
Even if you already have 35 years, working in retirement could still help. If your current job pays more than one of those lower-earning years, the new number will replace the old one and slightly increase your benefit.
Motivation
Not everyone works in retirement for the money. For some, it’s about purpose, structure, and social interaction. A few hours a week chatting with customers, managing a hobby business, or volunteering part-time (with a small stipend) can be a refreshing change of pace.
If you’re working for reasons other than income—but still want to be smart about your benefits—understanding the earnings test helps you strike the right balance.
Planning
Before you take that job or side gig, consider:
- Your age and how close you are to full retirement
- How much you expect to earn in 2026
- Whether you’re comfortable with possible short-term reductions in benefits
- The long-term gain from adding another work year to your record
A quick conversation with a financial advisor—or even running the numbers using SSA’s online tools—can help you decide what makes sense.
Working in retirement doesn’t have to be complicated, but it does come with a few moving parts—especially when Social Security is involved. The earnings test can feel like a penalty at first, but it’s really just a way to manage timing. Knowing how it works means you can enjoy the benefits of both a paycheck and your hard-earned retirement income without surprises.
FAQs
What is the earnings test for Social Security?
It’s a rule that withholds benefits if you earn over a limit before FRA.
Do withheld benefits get lost forever?
No, withheld amounts are repaid after you reach full retirement age.
What is the earnings limit in 2026?
The limit is expected to be around $22,320 for those under FRA.
Can working raise my Social Security benefit?
Yes, new work can replace low or zero years in your 35-year record.
Should I avoid work to keep benefits?
Not necessarily—many find the long-term gain worth the short-term cut.
