The $65,160 Social Security Earnings Cap That Applies Only in the Year You Reach Full Retirement Age

Working while receiving Social Security may seem simple enough, but earnings limits can change the picture quickly depending on how close you are to full retirement age.

Many people who are nearing full retirement age, or FRA, are ready to leave the workforce. For those born in 1960 or later, FRA is 67. But not everyone is eager to stop working at that point.

Some people keep working because they enjoy their jobs. Others stay employed to build more savings so they won’t have to depend as heavily on Social Security in retirement.

You are allowed to work while collecting Social Security, and you can claim benefits before FRA. In fact, you may apply as early as age 62.

However, if you start benefits before FRA and continue working, an earnings limit applies.

How work can affect your benefits

It is legal to work and collect Social Security at the same time, but doing so before FRA triggers an earnings test. If your wages go over the annual limit, some of your benefits may be temporarily withheld.

For people who will not reach FRA by the end of the year, the earnings test limit is $24,480. Above that amount, Social Security withholds $1 for every $2 earned.

That leaves relatively little room to earn extra income without affecting benefits temporarily. But the rules are more forgiving if you reach FRA during the year.

The earnings test limit is much higher for people who will attain FRA by year-end. In 2026, you can earn up to $65,160 without any temporary loss of Social Security benefits if you will reach FRA by Dec. 31. Only earnings above that level trigger withholding.

Even then, the reduction is smaller. For earnings above $65,160, Social Security withholds $1 for every $3 earned, which is less severe than the $1-for-$2 rule that applies to people who will not reach FRA during the year.

Withheld benefits are not gone forever

If high earnings cause Social Security checks to be reduced temporarily, that money is not permanently lost. Once FRA arrives, the withheld amount should be returned through larger monthly payments.

Keep in mind that the earnings test applies only before FRA. So if you filed for Social Security, continued working, and are set to reach FRA later in the year, the test ends when your birthday arrives. After that, you can earn any amount and still receive your full monthly benefit.

If you have not claimed Social Security yet and are still working as FRA approaches, it may make sense to wait before filing. The reason is not just the earnings test: claiming before FRA permanently reduces your monthly benefit, unlike temporary withholding under the earnings test. That early-filing reduction can hurt you financially over the long term.