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It’s easy to think of Social Security as a program that stays the same from year to year. After all, it’s been around for nearly a century.
But actually, Social Security will be undergoing a major change in 2026. It’s a change that could impact you if you collect benefits and also happen to have a job.
Keep up with this big Social Security change
Some people are surprised to learn that they can work while receiving Social Security. But it’s not so uncommon for retirees to continue to work in some shape or form.
The reality is that a lot of retirees need the money. As of 2022, the typical American between ages 65 and 74 only had $200,000 in retirement savings, according to Federal Reserve data. That could amount to a very small amount of income each year.
The average retired worker on Social Security today collects a little more than $2,000 a month. However, someone getting about $24,000 a year from Social Security with only a little bit of supplemental income from savings might need to work to be able to make ends meet.
While Social Security does allow recipients to work while collecting benefits, there are rules to follow. And one rule relates to the program’s earnings test.
Social Security’s earnings test does not apply to retirees who have reached full retirement age (FRA). But you can claim Social Security as early as age 62, which is well ahead of FRA.
If you’re working and receiving Social Security prior to FRA, you’ll be subject to the program’s earnings test. Exceeding its limit could mean having some benefits withheld.
However, the earnings test is changing for the better in 2026. Starting in January, you’ll be able to earn more money without risking having some of your Social Security withheld.
- If you’re working and under FRA, you’ll be able to earn up to $24,480 in 2026 without having any benefits held back, up from $23,400 in 2025.
- If you’re working and will reach FRA in 2026, you’ll be able to earn up to $65,160 without having any benefits held back, up from $62,160 in 2025.
If you’ll have reached FRA by the start of 2026, there’s no limit to worry about.
What happens to withheld benefits under the earnings test?
Knowing the new earnings test rules can help you figure out how much income you’re able to bring home before risking having some of your Social Security withheld. However, you should know that withheld benefits will be repaid to you eventually.
Once you reach FRA, the Social Security Administration will recalculate your monthly benefits and increase your payments. You won’t get your withheld benefits back in a single lump sum, but you will get the money back eventually.
However, it could be helpful to keep your income just below the earnings test limit so you don’t have to worry about losing a portion of your Social Security benefits temporarily. Now that there’s a higher limit in 2026, you may find that a lot easier to do.