Social Security Earnings Limit
If you begin drawing Social Security benefits before your Full Retirement Age, there is a limit on how much income you can earn from work.
If you earn more than this limit, part of your Social Security benefit may be temporarily reduced.
Understanding how the earnings limit works can help you avoid surprises and plan your retirement income more effectively.
Social Security Earnings Limit
If you begin drawing Social Security benefits before your Full Retirement Age, there is a limit on how much income you can earn from work.
If you earn more than this limit, part of your Social Security benefit may be temporarily reduced.
Understanding how the earnings limit works can help you avoid surprises and plan your retirement income more effectively.
Working During Retirement
More people today are choosing to continue working during retirement.
Some people work part-time to stay active, while others continue working full time for additional income.
If you start collecting Social Security before reaching your Full Retirement Age, it’s important to understand how your earnings may affect your benefits.
What Is the Social Security Earnings Limit?
The earnings limit is the maximum amount of earned income from work you can make while collecting Social Security before reaching Full Retirement Age.
If you earn more than the allowed limit, your Social Security benefit may be temporarily reduced.
Once you reach Full Retirement Age, the earnings limit disappears and you can earn as much as you want without affecting your Social Security benefit.
Current Earnings Limit
For 2026, the Social Security earnings limit is approximately:
$24,480 per year
If your earnings exceed this amount:
- Social Security may reduce your benefit temporarily
- For every $2 earned above the limit, $1 in benefits may be withheld
For example:
- Earnings limit: $24,480
- Your income: $34,480
- Amount over the limit: $10,000
In this example, Social Security could temporarily withhold $5,000 in benefits.
What Happens After You Reach Full Retirement Age?
Once you reach your Full Retirement Age (FRA):
- The earnings limit no longer applies
- You can work and earn unlimited income
- Your Social Security benefit will not be reduced because of work
If benefits were previously withheld due to the earnings limit, Social Security may recalculate your benefit at Full Retirement Age to account for those months.
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What Income Counts Toward the Earnings Limit?
Only earned income from work counts toward the Social Security earnings limit.
Examples of income that do count include:
- Wages from a job
- Self-employment income
Examples of income that do NOT count include:
- Investment income
- Interest or dividends
- Pension payments
- IRA or 401(k) withdrawals
- Rental income
- Alimony or child support
Because of this, many retirees are able to receive Social Security while still having other sources of retirement income.
Frequently Asked Questions
No. The earnings limit only applies until you reach your Full Retirement Age. After that, you can earn unlimited income without reducing your benefits.
No. Benefits withheld due to the earnings limit may be factored back into your monthly benefit later, once you reach Full Retirement Age.
Summary
The Social Security earnings limit only affects people who start benefits before reaching their Full Retirement Age and continue working.
If you plan to work while collecting Social Security early, it’s important to understand how the earnings limit could affect your monthly benefit.
With the right planning, many people can balance work and retirement income without unexpected reductions.