Social Security earnings test before full retirement age, Digi Mart USA News: Working while collecting Social Security can reduce your monthly checks, and one specific month determines when that reduction ends. Before you claim early or take on a new paycheck, it helps to understand how Social Security treats the money it withholds.
Many people use Social Security as a reason to stop working once benefit checks begin. Others are not ready to stop, or cannot afford to give up their paycheck entirely.
If you have limited savings and receive a modest monthly benefit, you may need to keep working to pay your bills. The Social Security Administration (SSA) allows beneficiaries to continue working.
If you work while receiving Social Security before reaching full retirement age (FRA), you are subject to an earnings test. That restriction does not last forever.
Once you reach FRA, you can earn any amount from a job without affecting your benefits under the earnings test. Before FRA, earning too much can cause benefits to be withheld.
In 2026, people who will reach FRA by Dec. 31 have $1 in Social Security withheld for every $3 of earnings above $65,160. In 2027, the earnings test limit rises.
For those reaching FRA next year, $1 is withheld for every $3 of earnings above $67,920.
The SSA counts only earnings before the month you reach FRA under the earnings test. In the month you reach FRA, you are not subject to the test.
Until then, earning too much from a job could shrink your monthly checks.
Benefits withheld for excess earnings are not lost permanently. Once you reach FRA, the SSA recalculates your monthly benefit and returns the withheld amounts through larger checks.
The main concern is the near-term loss of income, which could strain a budget if you are not careful.
For this reason, it is important to understand how the earnings test works. If you plan to keep earning a substantial income from a job, you may want to delay claiming benefits until FRA.
Filing before FRA permanently reduces your benefits, whether or not you work, and that reduction may not be worth locking in if your paycheck covers your expenses.
Delaying your Social Security claim past FRA results in larger monthly checks for life. If you are still working at FRA, that is a good reason to wait longer.
Holding off on benefits until age 70 could result in monthly checks that are 24% larger on a permanent basis, which could provide significantly more financial security throughout retirement.
