By the time many people are ready to claim Social Security, they are done earning a paycheck from a job.
The earliest age to claim Social Security is 62. Some older Americans choose to wait until full retirement age (FRA) so they can collect benefits without any reduction. FRA is 67 for those born in 1960 or later, and 2026 marks the first year that threshold fully takes effect. It is the final scheduled FRA increase under the 1983 congressional reform that shored up the program’s finances.
There is also the option to delay Social Security past FRA for larger monthly checks. For each year filers hold off, up to age 70, their benefit grows by 8%.
You may be collecting a Social Security check right now. If you have a robust nest egg to supplement those benefits, you may be living quite comfortably. But many people reach retirement age with little or no savings, and in that case, keeping some form of work income can make a real difference. The good news is that working while collecting Social Security is allowed. The rules, however, shifted in 2026, and there is important context worth understanding before you decide whether to keep a paycheck coming in.
How Social Security’s earnings test works in 2026
Once you reach FRA, you can earn any amount of money without it affecting your Social Security benefits. The earnings test only applies when you are collecting benefits before reaching FRA, and that is where careful planning pays off.
Earning too much while below FRA can result in having some of your Social Security checks withheld. The earnings test sets the amount you can earn from a job before that withholding kicks in, and the limit adjusts each year. In 2025, the limit was $23,400 for those below FRA all year, or $62,160 for recipients who would reach FRA sometime during the year. In 2026, those limits rose to $24,480 and $65,160, respectively.
The mechanics are straightforward. For beneficiaries below FRA for the entire year, the Social Security Administration withholds $1 for every $2 earned above $24,480. For those who will reach FRA sometime in 2026, the formula is more lenient: the SSA withholds $1 for every $3 earned above $65,160, and only for the months before their birthday. Starting with the month you actually reach FRA, the earnings test vanishes entirely.
One detail many people overlook is what income actually counts toward those limits. The SSA measures wages from employment and net profit from self-employment, including bonuses, commissions, and vacation pay. Pensions, annuities, investment income, bank interest, rental income, and distributions from IRAs or 401(k) plans are excluded from the calculation entirely. That distinction matters a great deal for retirees who draw from multiple income sources.
The first-year monthly rule can help mid-year retirees
If you are claiming Social Security for the first time in 2026 and you retired partway through the year, a special rule may work in your favor. Rather than applying the annual earnings limit to your full-year income, the SSA can instead use a monthly test for your first year of benefits. Under this rule, you can receive a full Social Security check for any month in which your earnings stay at or below $2,040 (for those under FRA all year), regardless of how much you earned in earlier months before you retired. For those reaching FRA in 2026, the monthly threshold is $5,430. This provision helps people who worked full-time for the first half of the year and then retired, since only the post-retirement months are evaluated on a monthly basis.
The 2026 COLA adds more breathing room
The 2026 cost-of-living adjustment also plays a role in this picture. Social Security benefits rose 2.8% at the start of the year, lifting the average monthly retirement check by about $56, from $2,015 to $2,071. That gain is real, though worth viewing in full context: the standard Medicare Part B premium rose to $202.90 per month in 2026, an increase of $17.90 (about 10%), which offsets part of the COLA for the roughly 70% of beneficiaries who have their Part B premiums deducted directly from their Social Security checks. Even so, the higher earnings test limits give working seniors meaningful additional flexibility to supplement their income without triggering a withholding.
Withheld benefits are not gone for good
One persistent misconception about the earnings test is that withheld benefits are lost permanently. They are not. Once you reach FRA, the Social Security Administration recalculates your monthly payment to account for any months benefits were withheld. Your checks will then be larger going forward to make up for what was held back. Think of it as a timing adjustment, not a penalty.
That means the earnings test should not deter you from working if you need the income. And even if your retirement finances are solid, continuing to work can anchor your routine, keep you socially engaged, and add another year of earnings to your Social Security record, potentially raising your eventual benefit amount.
A pending congressional proposal to watch
The earnings test itself may not be around much longer. The Senior Citizens’ Freedom to Work Act of 2026, introduced in the Senate by Sen. Rick Scott of Florida on March 24, 2026, and in the House by Rep. Greg Murphy of North Carolina on April 16, 2026, would repeal the retirement earnings test entirely. If enacted, beneficiaries below FRA could earn any amount without seeing their Social Security reduced. The bill remains in the early stages of the legislative process and has not yet advanced out of committee.
Congress has done this before on a narrower scale. In 2000, a predecessor bill eliminated the earnings test for beneficiaries at or above their FRA, passing the House 422-0 and earning President Clinton’s signature. The 2026 proposal would extend that same logic to those who claim before FRA. Proponents, including the Bipartisan Policy Center, estimate that full repeal could draw between 250,000 and 1 million additional Americans into the labor force by removing what critics call a financial disincentive to work. The bill has not yet passed, so the current rules remain in force for now.
Editor’s note: This revision adds the specific pre- and post-COLA average monthly benefit figures ($2,015 rising to $2,071), the Medicare Part B premium increase to $202.90 (a 10% rise that offsets part of the COLA), the SSA’s special first-year monthly earnings rule ($2,040 and $5,430 thresholds), a breakdown of which income types count toward the earnings test (wages and self-employment net income) versus those that do not (pensions, annuities, investment income, IRA and 401(k) distributions), the precise Senate and House introduction dates for the Senior Citizens’ Freedom to Work Act of 2026, and the historical precedent of the 2000 law that removed the earnings test for those already at FRA.
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