Social Security’s $24,480 Earnings Limit Won’t Be Around Much Longer
Social Security's earnings limit for working recipients is almost certainly changing in October, and if you collect benefits while holding a job, the new rules could shift how much you take home every month.
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There’s a reason so many people find Social Security confusing. Not only is the program loaded with rules, but some of those rules can change from one year to the next, making it hard to keep up.
For example, Social Security is primarily funded by payroll taxes. But the amount of earnings taxed to support the program changes every year. This year, workers pay into Social Security on their first $184,500 of earnings. Last year, only $176,100 of earnings were taxed for Social Security purposes.
Similarly, Social Security recipients who work may be subject to an earnings limit, depending on how old they are. And the rules there can change from year to year, too.
In fact, the current $24,480 limit is likely going up in 2027. So if you currently work while collecting Social Security, it’s important to pay attention.
How Social Security’s earnings test works
Once you reach full retirement age (FRA), you can earn any amount of money through a job without having any of your Social Security check withheld. FRA is 67 for people born in 1960 or later.
If you work while receiving Social Security prior to FRA, you’ll be subject to an earnings test. Exceeding the limit of that test could mean having some or all of your Social Security check withheld temporarily. Withheld benefits are returned to you in the form of larger checks once FRA arrives.
This year, the earnings test limit for people who won’t reach FRA at all is $24,480. Once your wages exceed that limit, $1 in Social Security is withheld from your benefits per $2 of earnings.
There’s also a much higher earnings limit for people who will reach FRA by the end of the year. In that case, you can earn up to $65,160 without having benefits withheld. From there, $1 in Social Security is withheld per $3 of earnings.
The earnings limits tend to rise on a yearly basis due to wage growth. So in 2027, there’s a good chance Social Security recipients who work will be able to earn more money before having benefits withheld.
That’s clearly a good thing, because given the average Social Security check today of just $2,088, many seniors need supplemental income to cover their costs in full. If you don’t have savings, the ability to work and earn more to manage your bills is crucial.
When a new earnings test limit gets revealed
The Social Security Administration is scheduled to reveal a new earnings test limit on Oct. 14. That’s the day an official 2027 cost-of-living adjustment (COLA) is set to be announced.
The COLA may take center stage, since it impacts all Social Security recipients. But if you work while receiving benefits, you’ll want to pay attention to the new earnings test limits for 2027.
If that announcement goes as expected, you should learn that you’ll have more leeway in the new year to earn wages without a negative impact on your Social Security checks. The question at this point is simply how much.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
