If you plan to work and receive Social Security benefits at the same time, remember your new number.
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For many people, retirement means the end of a career. However, for many older people, working after retirement makes financial and emotional sense.
Many people reach retirement without laying eggs. Working is a great way to generate additional income and supplement a small IRA or 401(k).
For retirees who don’t necessarily need the money but don’t want to be bored, working makes sense. Transitioning from a full-time career to an irregular schedule can be difficult. As a result, some older people choose to work simply because they want something to do or a reason to leave home.
Additionally, retirement can be lonely for those without large families or social networks. Getting a job may mean having the opportunity to meet different people and make new friends.
If you are retired and collecting Social Security, you should know that you are absolutely allowed to continue working at the same time. However, if you have not yet reached full retirement age (age 67 for those born after 1960), you should be wary of Social Security’s income test. The means test determines how much money you can earn from your job before your benefits are garnished.
The good news is that Social Security’s means-tested limits will increase in 2026. Here’s what you need to know:
Introducing new revenue testing limits
One misconception about Social Security’s earnings test is that if you exceed that limit, you permanently lose your benefits. What actually happens when you exceed the means-tested limit is that your benefits are withheld but repaid once you reach full retirement age.
You won’t get your money back all at once. Rather, it comes in the form of a larger monthly stipend.
Social Security’s earnings test applies only to those who receive benefits before reaching full retirement age. So if you’re 68 and working three days a week while receiving benefits, you don’t have to worry about earning too much.
The limits on social security income testing also tend to increase year by year. 2026 is no exception.
Next year, the income-tested limit for people under full retirement age will increase from $23,400 to $24,480, and this limit will not be reached at any point in 2026. From there, Social Security is deducted at the rate of $1 for every $2 of income.
Next year’s income test limits will be different for people who reach full retirement age in 2026. The limit increases from $62,160 to $65,160. From there, $1 of Social Security is deducted for every $3 of your income.
Let’s say you don’t reach full retirement age until August 2026, but you plan to work and collect benefits starting in January. If that’s the case, you’ll need to be careful with the earnings test, but there’s a fairly high threshold to exceed $65,160 before your benefits are withheld because you’re working.
Don’t interrupt your work for profit testing
If you have a good reason, financial or otherwise, to work in retirement, don’t let the fact that it’s means-tested stop you from doing what’s best for you.
Some people may be worried that their benefits will be garnished. But remember, you don’t lose that money forever. And the fact that your benefits can be withheld means you probably earn enough to make up for it.
That said, if you don’t want to deal with a Social Security garnishment, remember next year’s means-tested limits and aim to keep your income just below the threshold that applies to you. This is especially achievable if you work freelance and have control over your own time. But even if this isn’t the case, your employer may be willing to work with you to limit your income to a certain level if you explain your concerns.
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