Offered a Job While Collecting Social Security? Here’s the $24,480 Rule That Shrinks Your Check
Accepting a job offer while collecting Social Security sounds like a financial win, but a little-known rule can quietly shrink your monthly check before you even realize what hit you.
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In today’s labor market, a lot of people are unfortunately struggling to find work. But if you have unique skills that are high in demand, you may find yourself on the receiving end of a job offer, whether it’s a full-time role, part-time, or consulting gig. And if you’re struggling to get by on Social Security, you may be inclined to take it.
The truth is that living on just Social Security is very difficult. If you collect an average benefit, it means you’re only getting about $25,000 a year.
Even if you’re entitled to a much larger benefit, Social Security will generally only replace about 40% of your pre-retirement paycheck. Most retirees need more income than that, which is why a job offer might seem tempting, even if you were otherwise convinced you were past the point of working.
But before you accept a job while collecting Social Security, make sure to familiarize yourself with one key rule — how the earnings test works. Otherwise, you could be in for an unwanted surprise.
The $24,480 rule Social Security recipients need to know this year
You’re allowed to earn money from a job while collecting benefits from Social Security. But if you haven’t yet reached your full retirement age (FRA), you’ll be subject to an earnings test.
The earnings test dictates how much money you can earn from a job each year before potentially having some or all of your Social Security benefits withheld. The limit changes every year. But this year, the limit is $24,480 for Social Security recipients who are not yet at FRA and will not reach FRA by December 31.
If your earnings exceed the $24,480 limit, you don’t get your Social Security check taken away automatically. Instead, the Social Security Administration (SSA) withholds $1 in benefits per $2 of earnings above that limit.
If your income is high enough, you could lose your entire Social Security check, but that may not happen. You may end up losing just a portion of it.
You should also know that you technically don’t “lose” the Social Security that’s taken away for earning too much money. Once you reach FRA, the SSA should return that money to you in the form of larger Social Security benefits. So in reality, you’re generally only looking at a near-term loss of that income.
Still, losing a chunk of your Social Security could upend your finances and budget. So it’s important to understand how much worry-free money you can earn from a job before saying yes to one.
A few more key rules you need to know
If working is an option for you while collecting Social Security, it’s important to understand the earnings test inside and out. Another thing you should know is that the rules are different for people who work while on Social Security the year they’ll reach FRA.
In 2026, if you haven’t reached FRA but will by the end of the year, you get a higher earnings test limit than $24,480. In that case, you can earn up to $65,160 before having any Social Security withheld. And beyond that point, you’ll have $1 in benefits withheld per $2 of earnings.
Also, it’s only job-related wages that count toward the earnings test. If you have a portfolio that pays you dividends, for example, that sort of passive income doesn’t count.
So don’t sweat it if you’re withdrawing from your savings or using investments to supplement your Social Security benefits. It’s only earned wages you have to worry about.
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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.
