Many people are under the misconception that once you start collecting Social Security, you have to stop working. Fortunately, this is not true. On a much lighter note, you can collect your Social Security benefits and still work.
In today’s day and age, people are doing this. There are some people who continue to work because they want to keep busy and there are others who work to make extra income for their expenses.
The good news is that the government is changing the rules so that you can earn extra income without risking the loss of your Social Security benefits.
The Earnings Limit Is Going Up in 2026
It’s important to remember that if you start collecting Social Security before you reach full retirement age (FRA) and continue working, there’s a limit on how much you can earn each year before part of your benefits are temporarily reduced. This is called the earnings limit.
However, the Social Security Administration (SSA) is increasing that limit in 2026. This simply means that you will be able to make more money before any part of your Social Security benefit is reduced.
How the Earnings Test Works
Here’s how the system works in simple terms:
- Social Security will temporarily withhold $1 in payments for each $2 you earn over the yearly cap if you haven’t yet reached FRA.
- However, in the year that you reach FRA, Social Security will only withhold $1 for every $3 earned above the limit.
- Once you reach FRA, there’s no limit at all.
Should your benefits be withheld, don’t panic. As soon as you reach FRA, Social Security will recalculate your benefit payments and credit you for the months that your payments were reduced.
Why More People Are Working in Retirement
Simply put, the retirees of today are very different from those many years ago. Today, retirees are living longer and are more active, therefore they want to work part-time or even own small businesses.
Even though some people want to work just to keep active, there are some people who really need the extra income as the cost of living is constantly increasing.
The SSA supports retirees’ ability to continue working without facing penalties by increasing the earnings limit. It is a means of rewarding those who wish to continue working even after they begin receiving benefits.
Why This Change Matters
Social Security is changing many of its rules and this change shows how retirement has changed over the years. Today, being retired doesn’t necessarily mean that you stop working completely. Many people want to work part-time or even freelance.
In doing this, the government is giving retirees more flexibility and control over their finances. Retirees can continue to work while collecting Social Security benefits without having to worry about losing much money.
The Bottom Line
Social Security is meant to provide a portion of income during your retirement years; however retirees can throw away the idea that they need to stop working when they begin collecting Social Security benefits. In 2026 you will be able to work and earn more money before your benefits are impacted.
Many of those Americans who want to continue working to stay fit or keep up with the increasing costs of the economy, can be happy about this change. It allows for a little more financial stability.
As things continue to change, beneficiaries are urged to keep updated and follow the SSA for verified information. If you need, consult with a financial advisor to assist you in making decisions that affect your financial stability.
The key is to plan ahead and budget accordingly, this will allow you to know what your finances will be used for.