How Much Can I Earn While Taking Social Security?

One of the most common questions for those considering when to start social security benefits is: "Can I keep working if I'm collecting Social Security?"

The short answer is yes.

The longer answer is that if you claim Social Security before your Full Retirement Age (FRA, age 67 in most cases), your benefits may be temporarily reduced if your earnings exceed certain limits.

The good news is that many people misunderstand these rules and assume they are losing benefits forever—which is not the case.

First, What Counts as Earnings?

The Social Security earnings test only applies to earned income for the person applying for benefit, such as:

• Wages from a job

• Self-employment income

It does not apply to:

• A spouse's earned income

• IRA withdrawals

• 401(k) withdrawals

• Pension income

• Investment income

• Interest and dividends

• Capital gains

• Passive rental income

  
  

This surprises many retirees who assume all income counts toward the limit.

The 2026 Earnings Limits

If you are collecting Social Security and will be under Full Retirement Age for the entire year, you can earn up to $24,480 in 2026 without affecting your benefits.

If your earnings exceed that amount, Social Security will withhold:

$1 of benefits for every $2 earned above the limit.

Example

Let's say you:

• Collect Social Security

• Earn $34,480 from part-time work

• Are under Full Retirement Age all year

Your earnings exceed the $24,480 limit by $10,000.

Social Security would withhold: $10,000 ÷ 2 = $5,000

In this case, $5,000 of your annual Social Security benefits would be temporarily withheld as a result of earning more than the $24,480 earnings limit.

What Happens During the Year You Reach Full Retirement Age (age 67 in most cases)?

The rules become much more favorable.

In 2026, individuals reaching Full Retirement Age can earn up to $65,160 before any reduction applies.

This higher limit only applies to earnings received before the month they reach Full Retirement Age.

If earnings exceed that amount, Social Security withholds:

$1 of benefits for every $3 earned above the limit.

Example

Suppose you reach Full Retirement Age in October 2026 and earn $74,160 before October.

• Your earnings exceed the limit by $9,000.

Social Security would withhold: $9,000 ÷ 3 = $3,000

Only $3,000 of benefits would be temporarily withheld.

What Happens Once You Reach Full Retirement Age?

This is where many people get confused.

Beginning with the month you reach Full Retirement Age, the earnings test disappears completely.

You can earn any amount, and your Social Security retirement benefits will not be reduced because of your earnings.

Social security full retirement age is age 67 for the large majority of those reading this article.

You can see your full retirement age on the left-hand side of the first page of the social security benefit estimates that can be obtained through ssa.gov.

Are Those Withheld Benefits Gone Forever?

No.

This is probably the biggest misconception surrounding Social Security.

Many people believe Social Security is "penalizing" them for working.

In reality, the earnings test is more accurately described as a temporary withholding of benefits.

When you reach Full Retirement Age, Social Security recalculates your benefit and gives you credit for the months in which benefits were withheld. Your monthly benefit is then increased going forward.

For example, imagine someone:

• Claims Social Security at age 62

• Has enough earnings over the next several years that Social Security withholds 12 months of benefits

When they reach Full Retirement Age, Social Security will adjust their benefit as though they had claimed one year later than they actually did.

As a result, their monthly benefit increases for the rest of their life.

Do You Get a Lump-Sum Check at Full Retirement Age?

No.

Any amount withheld due to earnings above the earnings limit is generally not paid back as a refund check.

Instead, Social Security increases your monthly benefit going forward once you reach full retirement age.

If social security withheld 12 months worth of payments before full retirement age due to earnings limits, once you reach full retirement age they'll increase benefits as if you started collecting 12 months after you actually did to adjust for the earlier earnings reductions.

Over time, those larger monthly checks gradually return the value of benefits that were previously withheld.

The Bottom Line

Many retirees avoid part-time work because they fear losing their Social Security benefits.

In reality, the earnings test only applies before Full Retirement Age, only applies to earned income, and does not permanently take away benefits.

If you plan to work while collecting Social Security, understanding these rules can help you avoid surprises and make better claiming decisions.

In some situations, claiming early and continuing to work can still make sense.

In others, delaying benefits may be the better strategy.

The right answer depends on your earnings, retirement goals, tax situation, and overall financial plan.

Want To Discuss This Individually?

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2 - For non-clients: Complete the form on the website to request a retirement planning consultation: www.rolekretirement.com

This article is for informational purposes only and should not be considered as tax or legal advice. Advice is only provided after entering into an Advisory Agreement with the Advisor.