Many people are not ready to stop working completely when they become eligible for Social Security at 62. Others return to work after they start benefits. Either way, a common question is how a paycheck could change the Social Security payments they receive. The short answer: working may reduce benefits temporarily if you claim before full retirement age, may increase them over time in some cases, and may affect how much of your benefit is taxed. This guide explains how the rules work in 2026, and how a financial advisor in Long Beach may help you think through the timing of your claim.
Can You Work and Collect Social Security at the Same Time?
Yes. According to the Social Security Administration (SSA), you can receive retirement or survivors benefits and work at the same time. What changes is how your earnings interact with your benefit, and that depends mostly on your age. If you are younger than full retirement age and earn above certain limits, the SSA may withhold part of your benefit. Once you reach full retirement age, your earnings no longer reduce your benefit, regardless of the amount.
What Is Full Retirement Age?
Full retirement age (FRA) depends on your birth year. It is 66 for people born in 1954 or earlier, rises by two months per birth year for those born from 1955 to 1959, and is 67 for anyone born in 1960 or later. Because the earnings rules change at FRA, knowing your exact FRA is a helpful first step. You can confirm it through your my Social Security account.
The Social Security Earnings Test in 2026
The earnings test applies only to people who claim retirement benefits before FRA and continue to work. The SSA uses two different limits depending on where you are in relation to FRA:
| Your situation in 2026 | Annual earnings limit | What the SSA withholds above the limit |
|---|---|---|
| Under FRA for the entire year | $24,480[cite: 16] | $1 in benefits for every $2 earned above the limit[cite: 16] |
| Reach FRA during 2026 | $65,160 (counts only months before FRA)[cite: 16] | $1 in benefits for every $3 earned above the limit[cite: 16] |
| At or after FRA | No limit[cite: 16] | No earnings-based reduction[cite: 16] |
These figures come from the SSA’s Receiving Benefits While Working page and are adjusted annually.
A Simple Example
Consider someone who is under FRA all year and is entitled to 800permonth(9,600 for the year). If they earn $33,400, that is $8,920 above the $24,480 limit. The SSA would withhold half of the excess, or $4,460, leaving $5,140 of the year’s benefits. This example mirrors one published by the SSA; individual results vary.
What Counts as Earnings?
Only earned income counts toward the limit: wages, bonuses, commissions, vacation pay, and net self-employment income. The SSA does not count pensions, annuities, investment income, interest, veterans benefits, or other government retirement benefits. That distinction matters for retirees who draw on IRAs or investment accounts while also working part-time. To see how these income streams may fit together, you might review our guide to a retirement withdrawal strategy.
Are Withheld Benefits Lost?
Generally, no. When you reach full retirement age, the SSA recalculates your benefit to credit you for months in which benefits were reduced or withheld because of earnings. This may result in a higher monthly payment going forward, so that the withheld amounts are gradually made up over time. How quickly that happens depends on how long a person lives and on their individual record, so it is not something to count on in every case.
Can Working Increase Your Social Security Benefit?
It may. Your retirement benefit is based on your 35 highest-earning years, adjusted for wage growth. If you keep working and your current earnings are higher than one of those 35 years, or if you have fewer than 35 years of earnings on record, the new year may replace a lower or zero year in the calculation. The SSA reviews the records of beneficiaries with reported wages each year and, if your latest year is among your highest, recalculates your benefit and pays any increase retroactive to January of the following year.
The effect depends on your earnings history. For someone with a long record of higher earnings, an additional year may change little; for someone with several low or zero years, it may matter more.
How Working Can Affect the Taxes on Your Benefits
Earnings do not reduce your benefit once you reach FRA, but they can influence how much of your benefit is taxable by the IRS. Federal taxation is based on “combined income,” generally your adjusted gross income plus nontaxable interest plus half of your Social Security benefits. Under current federal thresholds, up to 50% of benefits may be taxable for single filers with combined income between $25,000 and $34,000 (or $32,000 to $44,000 for joint filers), and up to 85% above those levels. These thresholds are not indexed to inflation, so more retirees may be affected over time.
California does not tax Social Security benefits at the state level, which is a consideration for retirees in Long Beach and the surrounding area, although federal rules still apply. Because wages, IRA withdrawals, and other income all feed into the calculation, coordinating them may help manage the overall tax picture.
How Working May Affect Medicare Premiums
Higher income can also affect Medicare. Part B and Part D premiums may include income-related monthly adjustment amounts (IRMAA) for higher earners, based on tax returns from two years earlier. A one-time income event, such as a large IRA withdrawal or the sale of a property, may push income above a threshold for a year. If you are working in retirement, it may help to consider how earnings and withdrawals could interact with Medicare costs.
Should You Claim Social Security Before Continuing to Work?
There is no single answer, and the right approach depends on individual circumstances. Some factors people commonly weigh:
● Claiming age: Claiming earlier generally results in a smaller monthly benefit, while delaying past FRA may increase it through delayed retirement credits.
● Expected earnings: If earnings are likely to exceed the limit before FRA, part of the benefit may be withheld, at least temporarily.
● Other income sources: Pensions, IRA withdrawals, and spousal income may influence both taxes and Medicare premiums.
● Health and longevity: Life expectancy can affect how long any adjustments may take to pay off.
● Spousal and survivor benefits: Claiming decisions may affect benefits for a spouse or survivor, and the earnings test can apply to those benefits too.
Because these pieces interact, many people review them together with a professional. Our team offers Social Security analysis as part of retirement planning, and a financial advisor in Long Beach may be able to walk through how different claiming ages could look for your situation.
Local Considerations for Long Beach-Area Retirees
Southern California’s cost of living may lead some retirees to keep working part-time or consulting after they begin benefits. Retirees in Long Beach and nearby communities such as Seal Beach, Lakewood, Downey, Norwalk, Cerritos, Buena Park, Wilmington, and Paramountmay find it helpful to work with a team familiar with the region when reviewing Social Security timing alongside housing, healthcare, and tax considerations.
Steps to Consider Before Working While Collecting Benefits
● Confirm your full retirement age and review your earnings record in your my Social Security account.
● Estimate your expected earnings for the year and compare them with the applicable limit.
● Use the SSA’s earnings test calculator to see how earnings could affect payments.
● Consider how wages, withdrawals, and benefits may affect your taxes and Medicare premiums.
● Notify the SSA of expected earnings changes, as the agency asks beneficiaries to report earnings.
● Review the plan annually, since limits and thresholds are updated each year.
Frequently Asked Questions
How much can I earn while collecting Social Security in 2026?
If you are under full retirement age all year, the SSA’s 2026 limit is $24,480. In the year you reach FRA, the limit is $65,160 for the months before you reach FRA. After FRA, there is no earnings limit.
Does working after full retirement age reduce Social Security?
No. Beginning the month you reach full retirement age, earnings do not reduce your benefit, no matter how much you earn. Your income may still affect how much of your benefit is taxed.
Do I get the withheld money back?
The SSA recalculates your benefit at full retirement age to give credit for months when benefits were withheld. This may raise your monthly payment, though the overall result depends on your circumstances.
Does pension or investment income count toward the earnings limit?
No. The earnings test counts only wages and net self-employment income. Pensions, annuities, and investment income are not counted, although they may affect taxes.
Can working increase my Social Security benefit?
It may, if your current earnings replace a lower or zero year among your 35 highest-earning years. The SSA reviews records each year and adjusts benefits when an increase applies.
Does the earnings test apply to spousal or survivor benefits?
It can. If you claim spousal or survivor benefits before full retirement age and earn above the limit, part of the payment may be withheld.
Talk Through Your Social Security and Work Plans
Deciding when to claim Social Security while still working involves earnings limits, taxes, Medicare, and your broader retirement income. Working with a financial advisor in Long Beach may help you compare different timing scenarios and see how they might fit with your goals. If you would like to discuss your situation, contact our team or schedule a conversation.
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