Social Security’s 2027 Earnings Limit Is Now $25,560: What Working Beneficiaries Need to Know
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There is a reason so many people find Social Security confusing. The program is loaded with rules, and some of those rules change from one year to the next, making it hard to keep up.
Take payroll taxes. Social Security is primarily funded by them, but the amount of wages taxed to support the program shifts annually. In 2026, workers pay into Social Security on their first $184,500 of earnings. In 2027, that taxable wage base rises to $192,300.
The earnings test that applies to working Social Security recipients follows the same pattern. It adjusts year to year as well, and the new 2027 figures are now official. The Social Security Administration announced the updated limits on October 14, 2026, as part of its annual COLA fact sheet. If you currently work while collecting Social Security, here is exactly what changed.
How Social Security’s earnings test works
Once you reach full retirement age (FRA), you can earn any amount of money from 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, the earnings test applies. Exceeding its limit can result in some or all of your monthly check being withheld temporarily. Those withheld benefits are not lost permanently. They are returned to you in the form of larger monthly checks once you reach FRA.
In 2026, beneficiaries who will not reach FRA by December 31 can earn up to $24,480 before the withholding kicks in. In 2027, that limit rises to $25,560. Above that threshold, Social Security withholds $1 for every $2 of earnings.
For beneficiaries who will reach FRA by December 31, the threshold in 2026 is $65,160. In 2027, it increases to $67,920. In that case, $1 in Social Security is withheld for every $3 of earnings above the limit, and only wages earned before the actual birthday month count toward the total.
The annual earnings test ends entirely in the month you reach full retirement age, after which earnings face no restriction whatsoever.
Why the higher limit matters for working retirees
The earnings test limits rise annually in step with wage growth, which is why both thresholds are climbing again for 2027. That is good news for the many beneficiaries who rely on job income to supplement their checks.
The average monthly benefit for a retired worker currently stands at $2,095, rising to $2,170 in January 2027 with the new 3.6% COLA. For anyone living on that amount, supplemental wages matter enormously. A higher earnings test limit means more room to earn without facing a temporary reduction in benefits.
The 3.6% COLA for 2027 is the largest increase to Social Security benefits since 2023. It arrives at the same time as the higher earnings thresholds, giving working beneficiaries a double benefit heading into the new year.
What the October 14 announcement confirmed
The Social Security Administration announced a 3.6% cost-of-living adjustment for 2027 on October 14, 2026, the largest increase since 2023. Alongside the COLA, the agency published the updated earnings test limits and the new taxable wage base.
The official 2027 Social Security wage base is $192,300. The official retirement earnings test exempt amounts are $25,560 for beneficiaries under full retirement age all year and $67,920 in the year they reach full retirement age, counting only earnings before the month FRA is reached.
Around 72 million Social Security recipients will see the benefit increases beginning in January 2027. If you work while collecting benefits and have been managing around the old $24,480 ceiling, the new $25,560 limit gives you an additional $1,080 of annual earning room before any withholding applies.
Editor’s note: This article has been updated to reflect the Social Security Administration’s October 14, 2026 announcement confirming the 2027 earnings test limits of $25,560 (under FRA all year) and $67,920 (in the year FRA is reached), a 3.6% COLA for 2027 (the largest since 2023), the new $192,300 taxable wage base, and the updated average monthly retirement benefit of $2,095 rising to $2,170 in January 2027.
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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, The Washington Post, 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.
