The Social Security earnings test withholds $1 for every $2 earned above $24,480 a year in 2026 from beneficiaries who are below full retirement age, according to the Social Security Administration (SSA). In the calendar year a worker actually reaches full retirement age the threshold jumps to $65,160 and the withholding softens to $1 for every $3. From the month full retirement age arrives, the test disappears entirely and there is no limit on what a beneficiary can earn.
The word that matters is withheld. The money is not a fine and it is not lost, which is the opposite of what most people assume when they see a reduced deposit.
The two thresholds, month by month
The annual figures translate into monthly limits that the SSA applies in the first year of retirement:
- Below full retirement age all year: $24,480 a year, or $2,040 a month.
- Year of reaching full retirement age: $65,160 a year, or $5,430 a month, counting only the months before the birthday.
- From full retirement age: no limit.
Only earnings from work count. Pensions, annuities, investment income, interest, capital gains and withdrawals from a 401(k) or an IRA are outside the test. A retiree living on savings can draw any amount without touching the benefit.
What the arithmetic looks like
Take a beneficiary aged 64 collecting $1,600 a month who earns $40,480 from a part-time job. That is $16,000 above the threshold, so the SSA withholds half of it: $8,000 over the year.
The agency does not deduct a slice from each payment. It holds back whole monthly checks until the amount is covered, which is why some beneficiaries receive nothing for several months and then resume as normal. It is worth knowing in advance, because the pattern looks like an error and is not.
Why the money comes back
On reaching full retirement age the SSA recalculates the benefit upward to credit the months in which payments were withheld. The monthly figure rises permanently, and over a normal retirement the withheld amount is recovered.
In effect the earnings test works less like a penalty and more like a deferral. That said, a beneficiary who dies shortly after full retirement age never recovers it, which is one reason claiming early while still working tends to be the least efficient combination available.
The reporting obligation
Beneficiaries are expected to tell the SSA what they expect to earn, and to report changes during the year. The agency reconciles the estimate against the actual figures reported by employers and the IRS.
An estimate that turns out to be far too low is a common route to an overpayment notice the following year, recovered by withholding up to 50% of the monthly payment. Reporting a raise or a new job as it happens is considerably cheaper than explaining it afterwards.
Not the same rule as disability
The earnings test applies to retirement and survivor benefits. It has nothing to do with SSDI, where earnings are measured against Substantial Gainful Activity, set at $1,690 a month in 2026. Confusing the two is easy and expensive: exceeding SGA can end a disability benefit outright, while exceeding the earnings test only postpones part of a retirement one.
