A lot of people make the decision that once they retire, they’re done working for good. 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. Having income from a job can make it easier to cover those gaps.
Even if money is not a problem, you might enjoy the structure a part-time job provides. And if you were used to socializing at work and miss that aspect, it could be worth staying connected to a workplace and friendly faces.
The good news is that you are allowed to work while collecting Social Security. But there is 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), you can earn any amount of money without having benefits withheld. So if you are still working full-time with a $200,000 salary, you will receive your monthly Social Security checks in full once you have reached FRA.
Keep in mind, though, that you can claim Social Security as early as age 62. If you decide to work while collecting benefits before reaching FRA, you will be subject to what the SSA formally calls the retirement earnings test.
If you are under full retirement age for the entire year, the SSA deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2026, that limit is $24,480. That means a recipient earning $34,480 would see $5,000 withheld from their annual benefits, a meaningful bite out of any monthly budget that relied on both a paycheck and a Social Security check.
One important nuance: when figuring out how much to deduct, the SSA counts only wages from a job or net profit from self-employment. Bonuses, commissions, and vacation pay are included. Pensions, annuities, investment income, interest, veterans benefits, and other government or military retirement benefits are not counted. Retirees drawing income from a 401(k) or brokerage account have nothing to worry about from the earnings test.
That money withheld before FRA is not gone for good. The withheld benefits are not forfeited. Once FRA is reached, the SSA recalculates the monthly benefit to account for previously withheld amounts, resulting in an increased monthly benefit for the rest of the individual’s life.
Still, losing that money in your monthly checks could sting in the near term, particularly if you were counting on both Social Security payments and wages to cover all of your expenses.
The numbers look different for some retirees
The $24,480 limit applies only to Social Security recipients who will not reach FRA at any point during the year. For those who will hit FRA before December 31, the rules shift considerably.
In the year you reach full retirement age, the SSA deducts $1 in benefits for every $3 you earn above a different, higher limit. In 2026, that limit is $65,160. The SSA also counts only your earnings up to the month before you reach full retirement age, not your earnings for the entire year. That last point is worth emphasizing: if you turn your FRA age in November, only January through October earnings count against the $65,160 threshold.
The 2026 earnings limit is $24,480 for those below FRA and $65,160 for those reaching FRA, up $1,080 and $3,000 from 2025, respectively. Both thresholds are tied to national average wage growth and adjusted annually by the SSA.
A push to change the rules
Critics have long argued that the retirement earnings test discourages older Americans from staying in the workforce, and that pressure has recently found expression on Capitol Hill. Congressman Greg Murphy introduced the Senior Citizens’ Freedom to Work Act to repeal the retirement earnings test, which reduces benefits for Social Security beneficiaries who claim early retirement but choose to continue working above a certain earnings threshold. Senator Rick Scott introduced a companion bill in the Senate. The Senior Citizens’ Freedom to Work Act would repeal the Retirement Earnings Test under the Social Security Act, a rule that reduces Social Security benefits for retirees who continue working.
The proposal to eliminate the retirement earnings test comes as workers aged 55 and over are the fastest-growing age group in the labor force. The Society for Human Resource Management is advocating strongly for revisiting the earnings test provision. As of mid-2026, the bill had been referred to committee and no floor vote had been scheduled.
Make sure you know the rules
For now, the earnings test remains on the books and applies to any Social Security recipient who claims before FRA while continuing to work. The core question to ask yourself before filing early is straightforward: Do I intend to keep working? If so, you need to be mindful of how much you earn and how your wages could reduce your monthly Social Security payments.
You may also want to consider waiting until FRA to file for benefits. Doing so lets you avoid the earnings test entirely, collect your full benefit from day one, and earn as much as you want from work with zero impact on your monthly check.
Editor’s note: This article was updated to reflect the 2026 earnings test thresholds ($24,480 for those under FRA all year; $65,160 for those reaching FRA in 2026, up $1,080 and $3,000 from 2025 respectively), to clarify that the earnings test applies only to wages and net self-employment income and not to investment or retirement income, and to add context about the Senior Citizens’ Freedom to Work Act introduced in early 2026 by Sen. Rick Scott and Rep. Greg Murphy, which would repeal the retirement earnings test entirely.
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