For all those who are collecting Social Security benefits before reaching Full Retirement Age (FRA), there is some good news on the horizon for 2026. The government has made the decision to increase the earnings limit for those who retire early. This simply means that you will be able to work and earn more money as of next year without losing as much of your Social Security benefit.
These limits are part of what’s known as the Social Security earnings test, and if you’re still working while getting benefits, this update matters a lot.
What Are the Earnings Limits?
When you claim Social Security before reaching FRA, there is a certain limit that you cannot earn over. If you do, Social Security temporarily withholds a portion of your benefits.
This doesn’t mean the money is gone forever.
If You Stay Under Full Retirement Age for All of 2026
If you are under FRA for that year, your earnings-test limit will be:
- $24,480 in 2026
(up from $23,400 in 2025)
If you earn above that limit, Social Security will withhold:
- $1 in benefits for every $2 you earn over the limit
You could earn a little more money at work before any Social Security benefits are withheld thanks to this increased limit.
If You Reach Full Retirement Age in 2026
If you are reaching FRA at some point in 2026, you get a much higher limit:
- $65,160 in 2026
(an increase from $62,160 in 2025)
If you earn above that limit, Social Security will withhold:
- $1 in benefits for every $3 you earn over the limit
Do You Lose the Withheld Money? No — You Get It Back
Many people worry because they think that if Social Security benefits are withheld, they will not get the money back.
Here’s how it really works:
- Any benefits withheld because of the earnings test are not lost forever.
- As soon as you reach FRA, the Social Security Administration (SSA) will recalculate your benefits.
- Your payments will go up to make up for the months when money was withheld.
This simply means that you indeed receive the money back later on.
A Common Myth: You Won’t Get a Big Lump-Sum Check
There are many retirees who expect that Social Security will send a large back-pay check as soon as they reach FRA, this is a misunderstanding.
The truth is:
- You won’t get a single large payment to “refund” all the withheld benefits, the SSA will increase your monthly payments.
Think of it as a benefit adjustment (increase) gradually, to get back the benefits that were withheld.
Why This Matters for Early Retirees
These higher earnings limits are great news for anyone who wants to:
- Continue working part-time
- Work extra hours to earn more income
- Need additional finances to keep up with the rising cost of living
The limit increase allows for those who retired early, to have slightly more financial breathing room when it comes to their benefits. They can continue earning without worrying that much of their Social Security benefit will be withheld.
Even if money is withheld, rest assured you will get it back later on in the form of increased monthly benefit.
Final Thoughts
As the government made this decision, early retirees can have more flexibility when it comes to working and collecting benefits before reaching FRA. Now, they will be able to keep more their Social Security benefits.
This is especially important for those who live on fixed incomes, as the cost of living is constantly increasing and many struggle to keep up with the rising costs of groceries, housing and medical care.
Rest assured if your benefits are withheld, you will receive the money back gradually once you reach FRA.