Working While on Social Security in 2026: New Limits
- January 9, 2026
- Posted by: August
- Category: Social Security
It is common for retirees to keep earning income—whether through part-time work, consulting, seasonal work, or a phased retirement. Social Security allows you to work, but if you claim benefits before full retirement age, the retirement earnings test can temporarily reduce monthly benefit payments when earnings exceed certain limits.
The Core Idea (Plain English)
- If you are under full retirement age for the year and earn above the exempt amount, SSA may withhold some benefits.
- This is often misunderstood as a “penalty.” In practice, it is a timing issue—benefits may be withheld and later reflected in your record.
- Once you reach full retirement age, the earnings test no longer applies.
2026 Earnings Test Limits (What SSA Published)
| Situation | 2026 Exempt Amount | Withholding Rule |
|---|---|---|
| Under Full Retirement Age (entire year) | $24,480/year (or $2,040/month) | $1 withheld for every $2 earned above the limit. |
| Year You Reach Full Retirement Age (months before FRA) | $65,160/year (or $5,430/month) | $1 withheld for every $3 earned above the limit (applies only to months before FRA). |
| Beginning the Month You Reach FRA | No limit | Earnings test no longer applies. |
Why This Matters for Retirement Income Planning
Even when benefits are not “lost,” a withholding period can create a real short-term cash flow problem if you were counting on Social Security as a monthly baseline income source. That is why households who plan to work should coordinate:
- Expected earned income (W-2 wages and certain self-employment income)
- Claiming timeline (when benefits start vs. when work starts/ends)
- Monthly cash flow buffers (so a withholding surprise does not force reactive decisions)
Checklist for Working Retirees in 2026
- Estimate your 2026 earned income and compare it to the SSA exempt amount that matches your age status.
- If your income is variable, plan for “high months” that may push you above the monthly equivalent.
- Keep documentation (pay stubs, contracts, business income records) so any SSA adjustments are easier to reconcile.
- Build a small cash buffer if Social Security is a key baseline income source for you.
- If you are approaching full retirement age, note that the higher limit applies only to months before you reach FRA.
Key Takeaways
- Working while receiving Social Security is allowed, but the earnings test can affect benefit timing before FRA.
- 2026 exempt amounts were updated, and planning around them helps avoid cash-flow surprises.
- After you reach full retirement age, the earnings test no longer applies.
Source: SSA. Read the fact sheet. Additional context: Earnings test details.
Foxcove Insight
This update reflects broader themes we monitor closely for our clients — including retirement income stability, planning under changing market conditions, and the importance of aligning financial decisions with long-term goals.
At Foxcove Financial, we focus on strategies that support a confident retirement:
- Creating reliable income that supports your lifestyle
- Reducing the impact of market swings and longevity risk
- Using IRS rules, account types, and insured IRA options effectively
- Coordinating income sources so your plan stays consistent year-to-year
If you’re considering how today’s financial developments may affect your retirement income strategy, Foxcove Financial can help you evaluate insured IRA solutions and fixed annuity options that align with your goals.