Social Security: 2 Key Numbers to Know When You Work and Collect

Working while collecting Social Security benefits is allowed, but two figures determine whether part of your benefit will be withheld: for 2026, the annual earnings limit for those under full retirement age (FRA) all year is $24,480; for individuals who will reach FRA during the year, the pre‑FRA annual limit is $65,160. These thresholds are published by the Social Security Administration (SSA).

How the rules operate in practice depends on timing. If you are under FRA for the entire year, SSA withholds $1 in benefits for every $2 you earn above the annual limit (the monthly equivalent in 2026 is $2,040). In the year you reach FRA, SSA applies a higher monthly/annual test for the months before you attain FRA: in 2026 that test’s monthly threshold is $5,430 (annualized to $65,160), and the withholding rate is $1 for every $3 above the limit. In some situations a monthly test is used instead of the annual test; consult SSA guidance for specifics.

Importantly, benefits withheld under the earnings test are typically not lost permanently. The SSA recalculates your benefit when you reach full retirement age to give credit for months in which payments were withheld, effectively restoring the lost amount over time through higher ongoing benefits. That feature reduces the long‑term cost of working while receiving benefits, although it does not prevent short‑term cash‑flow impacts. Personal finance outlets and advisers emphasize planning to avoid unexpected withholding.

From a macro and household perspective, the interaction between work and benefits affects labor supply decisions among older workers and can influence retirement timing. Changes that affect the maximum taxable earnings base and cost‑of‑living adjustments (COLA) also alter real retirement income; for example, SSA’s 2026 fact sheet notes the COLA and adjustments to taxable maximums that shape benefit calculations. These broader parameters matter when modeling post‑retirement income alongside earned income.

Market and retirement planners recommend that anyone considering working while receiving Social Security run SSA’s calculators or seek professional advice to project annual earnings, likely withholdings and the eventual recalculation at FRA. In short, the two numbers to keep at front of mind for 2026 are $24,480 (under‑FRA annual limit) and $65,160 (year‑of‑FRA pre‑limit); understanding how they apply to your filing age and monthly earnings pattern will determine whether and how much benefits may be temporarily withheld.