The $24,480 Social Security Rule That Could Cost Retirees Thousands

A lot of people make the decision that once they retire, they’re done working for good. And that’s understandable. But there are plenty of good reasons to work in retirement.

For one thing, the money might come in handy. If you missed the boat on retirement savings and are living mostly on Social Security, you may be struggling to keep up with your costs. So having income from a job could make it easier to manage your expenses.

Even if money isn’t a problem, you might enjoy the structure a part-time job gives you. And if you were used to socializing at work and miss that aspect, it could pay to work for the company and friendly faces alone.

The good news is that you’re allowed to work while collecting Social Security. But there’s a $24,480 rule you should know about first.

When you work while receiving Social Security

The Social Security Administration (SSA) does not prohibit beneficiaries from holding down a job. Once you reach full retirement age (FRA), in fact, you can earn any amount of money without having benefits withheld. So if you’re still working full-time with a $200,000 salary, you’ll get your monthly Social Security checks in full as long as you’ve gotten to your FRA.

But remember, you can claim Social Security once you turn 62. And if you decide to work as a Social Security recipient who hasn’t reached FRA, you’ll be subject to an earnings limit by the SSA.

That limit changes every year. But in 2026, it’s $24,480. And you should know that for every $2 you earn above that limit, $1 in Social Security is withheld from your monthly benefits.

That doesn’t mean the money is gone for good. Once you reach FRA, the SSA will recalculate your monthly benefits and return that withheld money to you over time.

But losing that money in your monthly checks could sting in the near term, especially if you were counting on your Social Security payments plus your wages to cover all of your financial needs.

The numbers look different for some retirees

Now one thing you should know is that the aforementioned $24,480 earnings limit only applies to Social Security recipients who haven’t reached FRA and will not reach FRA by the end of the year.

Let’s say you’re collecting Social Security now and will reach FRA in November. In that case, the earnings limit is much higher. You can earn up to $65,160 without having benefits withheld. Beyond that point, for every $3 you earn, you’ll have $1 in Social Security held back from your checks, which isn’t as bad as it is for younger claimants.

Make sure you know the rules

Critics of Social Security’s earnings rules argue that they disincentivize older Americans from working. That’s not totally untrue.

But for now, the rules exist and aren’t going away. So if you’re thinking of filing for Social Security ahead of FRA, ask yourself one key question: Do I intend to keep working? If so, you’ll need to be mindful of how much you earn and how your wages might impact your Social Security payments.

And you may want to consider waiting until FRA to file for benefits so you can not only avoid a reduction, but earn as much money as you want without there being a negative impact on your monthly Social Security checks.