For millions of Americans, “retirement” in 2025 looks less like endless leisure and more like part-time shifts, freelance gigs, and side businesses just to keep up with rising living costs. With inflation still squeezing household budgets and savings stretched thin, many retirees are continuing to work — and now, there’s important news for anyone earning income while collecting Social Security.
Beginning January 2026, the Social Security Administration (SSA) will increase the earnings limits, giving working beneficiaries a little more room to earn before benefits are temporarily withheld under the Retirement Earnings Test.
It’s not a massive change, but for many households, the adjustments mean fewer worries about losing a month’s check simply for working extra hours.
How the Social Security Earnings Test Works
The earnings test only affects people who claim Social Security before reaching Full Retirement Age (FRA) — which is 66 to 67, depending on birth year.
Here’s the breakdown:
- At FRA or older: You can earn unlimited income with no reduction in benefits.
- Below FRA: Part of your Social Security benefit may be temporarily withheld if you earn more than the annual limit.
- Once you hit FRA: The SSA recalculates your monthly benefit to credit you for the months withheld. You are not losing money permanently — it’s delayed, not erased.
To review official SSA earnings test rules, visit the Social Security Administration.
What’s Changing in 2026
Each year, the earnings limits rise along with the cost-of-living adjustment (COLA). For 2026, the limits will increase again:
| Category | 2025 Limit | 2026 Limit | Reduction Rule |
|---|---|---|---|
| Under FRA for all of 2026 | $22,320 | $23,240 | $1 withheld for every $2 over the limit |
| Reaching FRA in 2026 | $59,520 | $62,180 | $1 withheld for every $3 over the limit (until FRA month) |
| At or above FRA | No limit | No limit | No reductions |
These increases give workers an extra $900 to $2,600 of earning space before any withholding kicks in.
Example: How Withholding Actually Works
Linda, age 64, expects to earn $30,000 in 2026 while receiving Social Security.
- 2026 limit: $23,240
- She earns: $6,760 over the limit
- SSA withholds: $1 for every $2, meaning $3,380 temporarily withheld
- Her checks pause until the SSA recoups that amount
- Once she reaches 67 (her FRA), her benefit increases permanently to account for the withheld months
This system is designed to remain actuarially fair over a lifetime.
Why the 2026 Changes Matter
Even with cooling inflation, groceries, rent, utilities, and health care continue to rise. With the average retirement check at about $2,008 per month, many households rely on work as a financial bridge.
A modest increase in the earnings limit — combined with an expected ~2.5% COLA for 2026 — gives retirees more room to keep income flowing without sacrificing benefits.
Planning Tips for Working Retirees
1. Estimate Your Earnings Early
Use the Retirement Earnings Test Calculator on SSA’s site to anticipate withholding.
2. Report Changes Quickly
If your income fluctuates, notifying SSA prevents surprise overpayments or underpayments later.
3. Time Jobs Around FRA
After the month you reach FRA, income no longer matters. Starting a job after your FRA month can prevent withholding altogether.
4. Delay Claiming (If Possible)
Waiting past age 62 increases your benefit — up to 8% per year until age 70.
5. Know Your FRA
For most future retirees, FRA is 67.
| Birth Year | Full Retirement Age |
|---|---|
| 1956 | 66 + 4 months |
| 1957 | 66 + 6 months |
| 1958 | 66 + 8 months |
| 1959 | 66 + 10 months |
| 1960 or later | 67 |
Beyond the Earnings Test: Other Factors to Watch
Taxes
Benefits may become partly taxable if your combined income exceeds
- $25,000 (single)
- $32,000 (married filing jointly)
Medicare Premiums
Higher income may push you into an IRMAA bracket, raising Part B and D premiums.
Future Benefits
If you’re working, you’re still paying Social Security taxes — which might increase your future benefit amount.
FAQs
How much can I earn in 2026 without losing Social Security benefits?
- Up to $23,240 if under FRA all year
- Up to $62,180 if you reach FRA in 2026
What if I earn more than the limit?
SSA temporarily withholds $1 for every $2 or $3 over the limit.
Do I ever get withheld benefits back?
Yes — after reaching FRA, your monthly benefit increases to repay the withheld months.
Do earnings limits apply once I reach FRA?
No — there is no limit after FRA.
