Introduction
For retirees and near-retirees who want (or need) to keep earning income while receiving Social Security benefits, 2026 brings some of the most meaningful updates in recent years. The retirement earnings test — the mechanism that temporarily reduces benefits for workers under full retirement age (FRA) who exceed certain income thresholds — now allows higher earnings before any withholding kicks in. These increases, driven by annual wage indexing, give more flexibility to those in their early 60s, part-time workers, and people approaching FRA. Whether you’re already collecting benefits or deciding when to claim, knowing the updated 2026 Social Security earnings limits, withholding rules, and what happens once you reach FRA can help you earn more without losing as much of your monthly check. Here’s a complete, up-to-date look at how the rules have changed for working while collecting Social Security in 2026 — and what it means for your wallet.
7 Key Changes to Working While Collecting Social Security in 2026
- Increased Earnings Limit for Those Under FRA All Year If you will remain under full retirement age for the entire calendar year 2026, you can now earn up to $24,480 ($2,040 per month) before any benefits are reduced — a meaningful jump from the 2025 limit of $23,400. Above this threshold, the SSA withholds $1 for every $2 earned over the limit. Importantly, all withheld amounts are not lost — they are recalculated and added back to your benefit once you reach FRA.
- Higher Threshold for Those Reaching FRA in 2026 If you will turn full retirement age at some point during 2026, the earnings limit applies only to the months before you reach FRA, and it has increased to $65,160 for 2026 (up from $62,160 in 2025). The withholding rate is more favorable here: $1 is deducted for every $3 earned above the limit until the month you attain FRA. After that month, no earnings limit applies for the rest of the year — a major advantage for those hitting FRA mid-year.
- No Earnings Limit After Reaching Full Retirement Age Once you reach FRA (typically age 67 for people born in 1960 or later), the earnings test disappears completely. You can earn unlimited income while receiving 100% of your Social Security retirement benefits — whether from a job, self-employment, consulting, or any other earned income source. This freedom applies to retirement, spousal, and survivor benefits alike.
- Withheld Benefits Are Repaid at FRA Any temporary reduction due to the earnings test is not permanent. When you reach full retirement age, the SSA automatically recalculates your monthly benefit upward to give you credit for every month benefits were withheld. This adjustment increases your payment for life — a built-in recovery mechanism that makes the rules fairer for those who work longer.
- Only Earned Income Counts Toward the Limits The earnings test applies only to wages from employment and net earnings from self-employment. Income from pensions, investments, rental properties, interest, dividends, capital gains, annuities, 401(k)/IRA withdrawals, or other passive sources does not trigger any withholding — giving retirees multiple ways to supplement income without penalty.
- Special Rule for the Year You Reach FRA In the calendar year you attain FRA, the SSA applies a more lenient test for the months before you reach the milestone. You can also receive full benefits for any whole month you are considered “retired,” regardless of your annual earnings. After the month you hit FRA, the earnings limit vanishes entirely — a key advantage for those planning to work heavily in their FRA year.
- Other 2026 Updates That Affect Workers
- The Social Security taxable maximum (wage base) rises to $184,500 in 2026 (from $176,100 in 2025), meaning higher earners pay the 6.2% payroll tax on more income.
- For people receiving SSDI, the substantial gainful activity (SGA) threshold increases to $1,690 per month (non-blind) and $2,830 (blind), allowing more work without immediately risking disability benefit loss.
Conclusion
The 2026 updates to working while collecting Social Security benefits — primarily the higher earnings limits under the retirement earnings test — provide real flexibility for retirees who want to stay active in the workforce. With limits now at $24,480 for those under FRA all year and $65,160 for those reaching FRA in 2026, many can earn significantly more before seeing temporary reductions. The most important takeaway: any withheld benefits are not lost — they return as a higher monthly payment once you reach full retirement age. These changes reflect rising wages and support longer, more flexible working lives. To see exactly how the rules apply to your personal situation, log into your my Social Security account at ssa.gov for customized earnings limits, benefit estimates, and projected payments. You can also call the SSA at 1-800-772-1213 for clarification. Accurate earnings reporting and understanding these updated thresholds ensure you maximize both your work income and Social Security benefits in 2026 without surprises.