Why Social Security Checks Can Still Shrink After the Earnings Test Ends at Full Retirement Age

If you plan to keep working while collecting Social Security, you may want to hold off on claiming benefits or taking a job until you reach full retirement age.

For people born in 1960 or later, full retirement age is 67. Once you reach that point, you can receive your full monthly benefit without reduction and earn any amount from work without being subject to Social Security’s earnings test.

The earnings test is the rule that can temporarily withhold part of your benefits if you make too much from a job before full retirement age. In 2026, those who do not reach full retirement age by the end of the year can lose $1 in benefits for every $2 earned above $24,480.

Those withheld benefits are not gone forever. Social Security credits them back later in the form of larger monthly payments after you reach full retirement age. Still, the rule can create short-term cash flow problems, which is why many people welcome the fact that it disappears at full retirement age.

Even so, reaching full retirement age does not guarantee that every dollar of your Social Security check stays in your pocket. Taxes can still reduce what you receive.

How Social Security benefits are taxed

Whether your benefits are taxed does not depend on your age or the age at which you file. It depends on your provisional income.

Provisional income is the sum of your adjusted gross income, tax-exempt interest, and 50% of your annual Social Security benefits.

For single filers, provisional income of $25,000 can make up to 50% of benefits taxable. For married couples filing jointly, that threshold is $32,000.

The impact can go even further. Single filers with provisional income above $34,000 may owe tax on as much as 85% of their Social Security benefits. The same applies to married couples filing jointly with provisional income above $44,000.

These thresholds have not been indexed to inflation for years, so even moderate income can cause part of a benefit check to be taxed.

A temporary break for many, but not forever

Some retirees with modest incomes may not owe tax on their benefits right now. A $6,000 senior deduction included in the One Big Beautiful Bill Act is helping many older Americans avoid taxes on Social Security checks.

That deduction is only temporary, however, and is scheduled to end in 2028. So even if your benefits are tax-free now, that relief may not last.

After you reach full retirement age, you no longer need to worry about the earnings test, but taxes can still take a bite out of your benefits.

To reduce the chance of that happening, consider managing withdrawals from retirement accounts so your income stays below the relevant threshold. A Roth conversion may also help, since withdrawals from Roth accounts do not count toward provisional income.