Social Security benefits serve as a lifeline of financial support for tens of millions of individuals across the country. It is a simple process, you contribute a portion of your earnings while you are working towards the Social Security payroll tax, and later once you retire, you can begin claiming benefits.
There is, of course, some fine print to the process and knowing this can make the difference between earning more or less money in your monthly benefit checks. While your lifetime earnings will be the primary determining factor when your benefits are calculated, factors such as age and alternate income sources can also have an impact on the final amount that will be reflected in your check.
If you decide to work while claiming benefits, your benefit could be reduced if your income exceeds the stipulated thresholds. This reduction will only apply if you have not yet reached full retirement age, however. If you have reached full retirement age and have decided to earn an additional income, there will be no limits or reductions imposed on you.
Each year, the earnings limit for working retirees increases, usually relative to average wages. As such the retirement earnings limit will once again be increasing in 2026. Here is what you need to know.
Full retirement age
The full retirement age (FRA) is currently 66-67 years of age, however, Social Security benefits can be claimed from age 62. When you claim benefits at FRA, you will receive 100% of the benefits you are entitled to. If you claim benefits before reaching FRA, your benefit will be locked into a reduction of up to 30%, depending on how many months remain between your current age and your FRA.
On the other hand, if you delay claiming benefits until you are 70 years of age, you will be entitled to an even higher benefit than you would have received at FRA. For every year that you delay claiming beyond FRA, you receive an 8% boost to your benefits.
As such, when you decide to earn an additional income while claiming benefits form the SSA, your FRA plays a very important role in determining whether or not your benefits will be reduced (assuming your income exceeds the stipulated thresholds).
Retirement earnings test
If you have already reached FRA and are claiming benefits from the SSA while also working and earning an income, there are no limits or reductions as to how much you can earn, nor will you benefits be reduced or impacted in any way.
If you have claimed benefits early, you may be subject to a retirement earnings test which could result in your benefits being reduced if your income exceeds the retirement earnings limits. There are two retirement earnings limits: the first limit applies to beneficiaries who will not be reaching FRA for the full year, while the second limit applies to beneficiaries who will be reaching FRA within the year. The second limit of the two is higher as well.
In 2026, both retirement earnings limits will be increasing as follows:
- If you are working and have not reached FRA and will not reach it for the full year, the retirement earnings limit will be increasing from $23,400 in 2025 to $24,480 in 2026. For every $2 you earn above $24,480, you will lose $1 of your Social Security benefit.
- If you are working and have not reached FRA but will reach it within the year, the retirement earnings limit will be increasing from $62,160 in 2025 to $65,160 in 2026. For every $3 you earn above $65,160, you will lose $1 of your Social Security benefit.
It is also worth remembering that these reductions are only temporary. As soon as you reach your respective full retirement age, the reductions stop and there will no longer be any income threshold to exceed before having your benefits reduced.