Working While Receiving Social Security
Published: 1/26/2026
Can you work while collecting Social Security? Yes, but if you haven't reached full retirement age, your benefits may be temporarily reduced if you earn above certain limits. The good news: any withheld benefits are returned to you later.
The Social Security "earnings test" is one of the most misunderstood aspects of the program. Many people believe that working will permanently reduce their benefits, but this isn't true. Understanding how the earnings test actually works can help you make better decisions about when to claim benefits and whether to continue working.
Key Takeaways
- You can work and receive Social Security at any age
- Before full retirement age: Benefits reduced $1 for every $2 earned above $24,480 (2026)
- Year you reach FRA: Reduced $1 for every $3 above $65,160 (2026)
- At or after FRA: No earnings limit - earn any amount
- Withheld benefits are not lost - they're returned through higher payments after FRA
- Only wages and self-employment income count - not investments, pensions, or retirement withdrawals
2025 and 2026 Earnings Limits
The Social Security Administration adjusts the earnings limits annually based on changes in national average wages.
| Situation | 2025 Limit | 2026 Limit |
|---|---|---|
| Under FRA all year | $23,400 | $24,480 |
| Year you reach FRA | $62,160 | $65,160 |
| Month you reach FRA and after | No limit | |
How the Earnings Test Works
The earnings test has different rules depending on your age relative to your full retirement age (FRA):
Under Full Retirement Age All Year
If you won't reach FRA at any point during the year, Social Security deducts $1 from your benefits for every $2 you earn above the annual limit.
Example: Sarah, Age 63
- Sarah's benefit: $1,500/month ($18,000/year)
- Her 2026 earnings: $34,480
- Amount over limit: $34,480 - $24,480 = $10,000
- Benefit reduction: $10,000 ÷ 2 = $5,000
- Annual benefits received: $18,000 - $5,000 = $13,000
Social Security withholds benefits starting in January until the $5,000 is recovered. Sarah receives no checks for the first 3-4 months, then full checks the rest of the year.
Year You Reach Full Retirement Age
In the year you turn FRA, the rules are more generous. Social Security only counts earnings from months before your birthday month, and deducts just $1 for every $3 over a higher limit.
Example: Tom Turns 67 (FRA) in August 2026
- Tom's benefit: $2,000/month
- His earnings January-July: $70,000
- Amount over limit: $70,000 - $65,160 = $4,840
- Benefit reduction: $4,840 ÷ 3 = $1,613
- Tom loses about one month of benefits
- Starting in August, no earnings test applies
Your Withheld Benefits Are Returned
This is the most important and least understood part of the earnings test: benefits withheld are not lost forever. When you reach full retirement age, Social Security recalculates your benefit to give you credit for the months when benefits were withheld.
Example: How Benefits Are Returned
Lisa claimed benefits at 62 and had benefits withheld for 24 months due to the earnings test before reaching her FRA of 67.
- Original reduction for claiming at 62: 30% (she gets 70% of PIA)
- After FRA recalculation: Credit for 24 months of withheld benefits
- New reduction: Approximately 20% instead of 30% (she now gets ~80% of PIA)
- This higher amount continues for the rest of her life
The recalculated benefit effectively "pays back" the withheld benefits over time through permanently higher monthly payments.
What Counts as "Earnings"?
Only certain types of income count toward the earnings test. Understanding this distinction is crucial for retirement planning.
Income That COUNTS
- Wages from employment
- Net self-employment income
- Bonuses
- Commissions
- Vacation pay
- Severance pay (in some cases)
Income That Does NOT Count
- Investment income (dividends, interest)
- Capital gains
- Pension payments
- Annuity income
- 401(k) or IRA withdrawals
- Rental income (if not a business)
- Social Security benefits
- Veterans benefits
- Other government benefits
The Monthly Earnings Test (First Year Rule)
In your first year of receiving benefits, Social Security offers an alternative monthly test. This helps people who retire mid-year after earning significant income earlier in the year.
| Situation | 2025 Monthly Limit | 2026 Monthly Limit |
|---|---|---|
| Under FRA all year | $1,950 | $2,040 |
| Year you reach FRA | $5,180 | $5,430 |
Example: Mid-Year Retirement
Mike, age 64, earned $80,000 from January through June 2026, then retired and started Social Security in July. From July through December, he earns nothing.
- Annual test: $80,000 is way over the $24,480 limit
- Monthly test: In July-December, he earns $0/month (under $2,040 limit)
- Result: Mike receives full benefits for July-December
The monthly test only applies in the first year you receive benefits. In subsequent years, only the annual test applies.
Special Situations
Self-Employment
If you're self-employed, Social Security counts your net earnings (profit after business expenses). In your first year of retirement, they may also apply a "services test" - if you work more than 45 hours per month in your business (or 15-45 hours in a highly skilled occupation), you may not be considered retired for that month regardless of income.
Working Outside the United States
Different rules apply if you work outside the U.S. The "foreign work test" may suspend benefits for any month you work more than 45 hours, regardless of earnings amount. See our international agreements guide for more information.
Family Benefits
If your spouse or children receive benefits on your record, your excess earnings can reduce their benefits too - but only up to the maximum family benefit. Their own earnings don't affect your benefit.
Common Misconceptions
Reality: Benefits withheld due to the earnings test are credited back to you at full retirement age through higher monthly payments. You eventually recover the withheld amounts.
Reality: Only wages and self-employment income count. Investment income, pensions, retirement account withdrawals, and other passive income do not trigger the earnings test.
Reality: This depends on your situation. Because withheld benefits are returned, continuing to work while claiming early may still make sense. The math depends on your expected earnings, life expectancy, and other factors.
Reality: Once you reach full retirement age, the earnings test no longer applies. You can earn unlimited amounts without any impact on your Social Security benefits.
Strategic Considerations
Should You Claim Early If Still Working?
The decision to claim Social Security while still working depends on several factors:
- How much will be withheld? Calculate your expected reduction using the limits above
- Life expectancy: Longer life expectancy favors delaying benefits
- Other income sources: Can you cover expenses without Social Security?
- Tax implications: Working income plus Social Security may push you into higher tax brackets
- Spousal benefits: Your claiming decision affects your spouse's potential survivor benefits
Partial-Year Strategies
If you're planning to reduce work, consider timing:
- Retiring early in the year means fewer months of earnings count against you
- The monthly test in your first year can help if you retire mid-year
- Timing your FRA birthday month is important - earnings after that month don't count
Frequently Asked Questions
Can I work while receiving Social Security retirement benefits?
Yes, you can work while receiving Social Security benefits at any age. However, if you're under full retirement age (FRA), your benefits may be temporarily reduced if your earnings exceed certain limits. Once you reach FRA, you can earn any amount without affecting your benefits.
What is the Social Security earnings limit for 2026?
For 2026, if you're under full retirement age all year, you can earn up to $24,480 before your benefits are reduced. If you reach FRA during 2026, the limit is $65,160 for the months before you reach FRA. After reaching FRA, there is no earnings limit.
How much will my Social Security be reduced if I work?
If you're under full retirement age all year, Social Security deducts $1 from your benefits for every $2 you earn above the annual limit. In the year you reach FRA, they deduct $1 for every $3 above a higher limit, and only count earnings before your birthday month.
Do I lose Social Security benefits permanently if I earn too much?
No, you do not lose benefits permanently. Any benefits withheld due to the earnings test are returned to you after you reach full retirement age through higher monthly payments. Social Security recalculates your benefit amount to credit you for the months when benefits were withheld.
What income counts toward the Social Security earnings test?
Only wages from employment and net self-employment income count toward the earnings test. This includes bonuses, commissions, and vacation pay. Investment income, pensions, annuities, interest, capital gains, government benefits, and retirement account withdrawals do NOT count.
Does the earnings test apply after full retirement age?
No. Once you reach full retirement age, the earnings test no longer applies. You can earn any amount from working without any reduction to your Social Security benefits.
What is the monthly earnings test?
In your first year of retirement, Social Security uses a monthly test as an alternative. In 2026, if you earn $2,040 or less in a month (or $5,430 if reaching FRA that year), you receive full benefits for that month regardless of your annual earnings. This helps people who retire mid-year.
Calculate Your Benefits
Understanding how the earnings test affects you starts with knowing your benefit amount. Use the SSA.tools calculator to estimate your Social Security benefits based on your earnings history.
For more information on related topics, see our guides on Normal Retirement Age, federal taxation of benefits, and Primary Insurance Amount.