Change #5 The Earnings Test Limits Increase for Working Beneficiaries

What Changed

Many Americans choose to continue working — either part-time or full-time — after beginning to collect Social Security retirement benefits, particularly those who claim before reaching their full retirement age.

For those beneficiaries, the Social Security earnings test determines how much of their benefit may be temporarily withheld based on their work income. In 2026, both earnings test thresholds increased, allowing working beneficiaries to earn more before any benefits are withheld.

For beneficiaries who will not reach full retirement age at any point during 2026, the earnings limit rises to $24,480 (up from $23,400 in 2025). For every $2 earned above this threshold, Social Security withholds $1 in benefits. For example, a beneficiary earning $40,000 from work in 2026 would have their annual Social Security benefits reduced by $7,760 — half the difference between $40,000 and $24,480.

For beneficiaries who will reach full retirement age during 2026, a more generous threshold applies: earnings up to $65,160 (up from $62,160 in 2025) are exempt from the earnings test, and benefits are withheld at a rate of only $1 for every $3 earned above the limit.

Once a beneficiary reaches their full retirement age, the earnings test no longer applies — they can earn any amount without affecting their Social Security benefits.

Key Insight: Benefits temporarily withheld under the Social Security earnings test are not lost — they are recredited to your record when you reach full retirement age, resulting in a higher monthly benefit going forward. The net lifetime impact depends on how long you live after reaching FRA.