Marina
If you’re thinking of working while collecting benefits from the Social Security Retirement Benefits program, 2026 brings some important changes.
Whether you’re already receiving benefits or considering starting them soon, here’s a detailed breakdown of what’s shifting and how it might affect your income.
What’s the current situation?
Right now, if you’re collecting Social Security before reaching your Full Retirement Age (FRA) (FRA) and you’re still working, the program uses what’s called an earnings test.
It limits how much you can earn without reducing your monthly benefits.
- If you are below FRA for the whole year in 2025, the earnings limit is $23,400. If you earn more, the program will withhold $1 in benefits for every $2 you go over that limit.
- If you will reach your FRA in 2025, the higher limit is $62,160, and the withholding rate becomes $1 for every $3 earned above that limit — but only up to the month you reach FRA.
- Once you hit FRA, the earnings test no longer applies — you can work and earn unlimited income without your Social Security monthly benefit being reduced.
What’s changing in 2026?
For 2026, the structure of the earnings test remains the same — the change lies in the income thresholds. These are being bumped up, giving you more breathing room if you work while collecting.
Here’s what’s projected:
| Scenario | 2025 Limit | 2026 Projected Limit | Change |
|---|---|---|---|
| Under FRA all year | $23,400 | ~$24,360 | + ~$960 |
| Reaching FRA in 2026 | $62,160 | ~$64,800 | + ~$2,640 |
That means if you’re working while collecting benefits and you are under FRA all year, you could earn about $960 more before your benefit is reduced. If you’ll reach FRA in 2026, you’ll have around $2,640 more in earnings before the stricter rule kicks in.
How the earnings test works
Here’s a step-by-step explanation:
- Estimate your work income for the year.
- If that income exceeds the limit (depending on your FRA status), the program reduces your benefit:
- Under FRA: lose $1 for every $2 above the limit.
- Year you reach FRA: lose $1 for every $3 above the limit (before your birthday month).
- The withheld amount isn’t lost forever — when you hit FRA, your benefit is recalculated and increased to credit you for the months of reduction.
- After you reach FRA (that month), no earnings limit applies for the remainder of the year.
Example: Suppose you’re 64 in 2026, under FRA, and expect to earn $30,000. If the projected 2026 limit is $24,360, that’s $5,640 over the limit.
At a $1 for $2 rate, that would mean about $2,820 withheld from your benefit. When you hit your FRA, your future monthly benefit will be adjusted upward to account for that.
Why the earnings test exists
The earnings test is not meant to punish working — it’s a fairness mechanism. The logic: If you claim benefits early and continue working and earning, the program must ensure the benefit reflects that mix of income and benefits.
Once you reach FRA, the protection ends because you’ve reached your standard retirement age and your benefit is recalculated accordingly.
Planning ahead for 2026
- Estimate your earnings early for the year and compare to the relevant limit.
- If you expect to exceed it, consider reducing work hours or deferring benefit claim.
- Update your income estimates with the program if your work situation changes.
- Understand your FRA (based on birth year) so you know which threshold applies to you.
- Remember that once you hit FRA, earnings no longer reduce your benefits.
The 2026 changes to working-while-collecting rules in Social Security offer greater flexibility for recipients who want or need to work.
By raising the income limits, the program gives you more room to earn without penalising your monthly benefit. But the key is planning.
If you’re working or thinking of working while collecting benefits, review your expected earnings, understand your FRA status, and choose your timing and work hours wisely.
With smart action, you can maximise your benefit while continuing to work.
FAQs
Will the limit increase every year?
Yes — historically these earnings thresholds are adjusted each year to reflect wages and inflation. 2026’s increase is part of that trend.
If I lose benefit payments because of the earnings test, are they gone for good?
No — the withheld amounts are credited once you reach your FRA. Your benefit is recalculated to make up for those reductions.
Does this apply to all types of income or only wages from a job?
The earnings test applies to earned income — wages, salary, net self-employment income. It does not apply to pensions, withdrawals from retirement accounts, interest, dividends or other investment income.