Your Social Security Benefit Could Be Smaller Than You Expect if You Ignore This Rule

Once you start collecting Social Security, you might get very used to having that guaranteed paycheck. But it may not be enough to cover all of your expenses.

If you don't have retirement savings and find yourself struggling on Social Security alone, you may decide to go back to work. And the good news is that you're allowed to work and collect Social Security at the same time.

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But some Social Security recipients need to stick to an earnings limit to avoid having their monthly checks shrink in the short term. Here's how to know if that rule applies to you and how much money you can make from a job before withheld benefits come into play.

How Social Security's earnings test works

Social Security's earnings test applies to recipients who have not yet reached full retirement age, which is 67 for anyone born in 1960 or later. If you're in that category, you can only earn a certain amount of money before having benefits withheld.

The limits of the earnings test change every year. In 2026:

• You'll have $1 in Social Security withheld per $2 of earnings above $24,480 if you will not reach full retirement age by Dec. 31.
• You'll have $1 in Social Security withheld per $3 of earnings above $65,160 if you will reach full retirement age by the end of the year.

When benefits are withheld for exceeding the earnings-test limit, they're not lost forever. Once you reach full retirement age, the Social Security Administration will recalculate your monthly benefits and return that withheld money to you in the form of larger checks.

But in the near term, exceeding the earnings-test limit could cause your Social Security benefits to shrink. So it's important to know what the limits entail and what to prepare for.

An important rule you need to know

Social Security's earnings test may not be the program's most well-known rule. But it's an important one to familiarize yourself with if you intend to return to work after filing for benefits.

If you haven't claimed Social Security yet and have not yet reached full retirement age, you may want to hold off on filing if you know that you intend to work and expect to earn a decent amount of money.

Claiming Social Security before full retirement age reduces your benefits permanently, regardless of whether you work. If you'll be looking at withheld benefits anyway for making too much money, there may be little point to filing before full retirement age.

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