If you collect Social Security before full retirement age and keep working, part of your benefit may be temporarily withheld once your earnings pass a yearly limit. In 2027 that limit is $25,560, rising to $67,920 in the year you reach full retirement age, and it disappears completely from the month you reach full retirement age. Money withheld is not simply lost: your monthly benefit is recalculated upward later to make up for it.
Key takeaways
- Under full retirement age (FRA) for all of 2027: $1 is withheld for every $2 you earn above $25,560.
- In the calendar year you reach FRA: $1 is withheld for every $3 above $67,920, counting only earnings before the month you reach FRA.
- From the month you reach FRA onward, there is no earnings limit at all.
- Only wages and net self-employment income count. Pensions, investment income, IRA withdrawals and other benefits do not.
- Withheld months are credited back at FRA, which raises your monthly check for the rest of your life.
The 2027 earnings limits at a glance
Social Security's "retirement earnings test" applies only to people who have started benefits and have not yet reached full retirement age. For anyone born in 1960 or later, FRA is 67. If you are unsure of yours, our full retirement age calculator will tell you the exact month.
| Your situation in 2027 | Annual limit | Monthly equivalent | Amount withheld |
|---|---|---|---|
| Under FRA for the whole year | $25,560 | $2,130 | $1 for every $2 above the limit |
| Reaching FRA during 2027 (earnings before your FRA month) | $67,920 | $5,660 | $1 for every $3 above the limit |
| At or past FRA | No limit | No limit | Nothing withheld |
These limits rise most years along with average wages. The higher limit in the year you reach FRA is meant to ease the transition, and it only looks at the months before the month your FRA begins.
What counts as earnings, and what does not
The earnings test is about work income. Social Security counts:
- Gross wages from a job, including bonuses and vacation pay, generally counted when they are earned.
- Net earnings from self-employment, generally counted when they are received.
It does not count:
- Pensions and annuities
- Withdrawals from IRAs and 401(k) plans
- Interest, dividends and capital gains
- Rental income from property you do not actively run as a business
- Other government benefits, including your Social Security itself
This is a common point of confusion. A retiree of 64 with $60,000 a year coming from a pension and investments, and no job, has nothing withheld. A retiree of 64 earning $40,000 at a part-time job does.
Enter your expected 2027 earnings and benefit to see how much, if anything, would be withheld.
Use the Earnings Limit CalculatorWorked example: under full retirement age all year
Carol is 63 throughout 2027. She started Social Security at 62 and gets $1,500 a month, or $18,000 for the year. She also works and expects to earn $35,560 in 2027.
- Earnings above the limit: $35,560 − $25,560 = $10,000
- Amount withheld: $10,000 ÷ 2 = $5,000
- Benefits she still receives for the year: $18,000 − $5,000 = $13,000
Social Security does not usually trim each check by a small amount. Instead, it typically holds back whole monthly payments at the start of the year until the withholding is covered. With a $1,500 benefit, covering $5,000 takes four checks ($6,000). Carol would receive nothing for January through April, then her full $1,500 from May onward. The extra $1,000 held back is paid to her after the year ends, once her actual earnings are confirmed.
Add it up and Carol still comes out ahead by working: $35,560 in wages plus $13,000 in benefits is $48,560, compared with $18,000 from benefits alone.
Worked example: the year you reach full retirement age
David turns 67, his FRA, in October 2027. From January through September he earns $79,920. His benefit is $2,000 a month.
- Earnings above the higher limit: $79,920 − $67,920 = $12,000
- Amount withheld: $12,000 ÷ 3 = $4,000
- That equals two full monthly checks ($2,000 × 2)
Anything David earns from October onward does not count at all. From his FRA month forward, he can earn any amount without losing a dollar of benefits.
The special monthly rule for your first year
Many people retire partway through a year after already earning more than the annual limit. To avoid penalizing them, Social Security uses a special rule for the first year of retirement. In that year, you can receive a full benefit for any month in which you earn no more than the monthly limit ($2,130 if you are under FRA all year in 2027) and do not perform substantial work in self-employment, no matter what you earned earlier in the year.
For example, if Ellen, age 63, earns $50,000 from January through June 2027, retires on June 30 and starts benefits in July, she can be paid for July through December as long as she earns $2,130 or less in each of those months. Her earlier $50,000 does not cause any withholding.
Why withheld benefits are not lost
When you claim before FRA, your benefit is permanently reduced for each month you are early. Claiming at 62 with an FRA of 67 cuts your benefit by 30%. But when you reach FRA, Social Security recalculates your benefit and removes the reduction for any month in which your benefit was fully withheld.
Example of the recalculation
Suppose Frank's full benefit at 67 (his primary insurance amount) is $2,000. He claims at 62, 60 months early, and gets 70% of that, or $1,400. Because of his job, 12 full months of benefits are withheld before he reaches FRA.
- At FRA, he is treated as if he had claimed 12 months later, so 48 months early instead of 60.
- Reduction for 48 months: the first 36 months at 5/9 of 1% each (20%) plus 12 months at 5/12 of 1% each (5%) = 25%.
- New benefit: $2,000 × 75% = $1,500 a month, before any cost-of-living adjustments.
That extra $100 a month continues for life. Whether it fully makes up for the withheld months depends on how long you live, which is the same trade-off explored in our guide to the Social Security break-even age.
Should you delay claiming instead?
If you expect to earn well above the limit, it can be simpler to wait. Benefits that would mostly be withheld provide little cash now, while delaying avoids the paperwork and lets your benefit grow. Each year you delay past FRA, up to 70, adds 8% through delayed retirement credits. Our when to claim calculator compares claiming ages side by side.
Other points to keep in mind:
- Family benefits. If a spouse or child receives benefits on your record, your excess earnings can reduce their checks too. A spouse's own earnings affect only the spouse's benefit. See our guide to spousal benefits.
- Taxes are a separate matter. The earnings test decides how much is withheld, not how much is taxed. Working can also make part of your benefit taxable, as explained in Is Social Security taxable?
- Report changes. If your earnings estimate changes during the year, tell Social Security so your withholding can be adjusted and you avoid an overpayment.
- Disability benefits use different rules. SSDI recipients face a separate set of work limits, not this earnings test.
Frequently asked questions
What is the Social Security earnings limit for 2027?
It is $25,560 a year if you are under full retirement age for all of 2027, with $1 withheld for every $2 above it. In the year you reach full retirement age, the limit is $67,920, with $1 withheld for every $3 above it, counting only earnings before your FRA month.
Is there an earnings limit after full retirement age?
No. Starting with the month you reach full retirement age, you can earn any amount without having benefits withheld.
Does a pension or 401(k) withdrawal count toward the limit?
No. Only wages and net self-employment earnings count. Pensions, retirement account withdrawals, investment income and other benefits are excluded.
Do I get the withheld money back?
Not as a lump sum. Instead, at full retirement age your monthly benefit is recalculated to give you credit for the months that were withheld, which raises your payment going forward. Any amount withheld beyond what was required is repaid after the year ends.
Does my spouse's job affect my benefit?
Only your own earnings reduce your own retirement benefit. However, if your spouse receives a benefit based on your record, your earnings above the limit can reduce their payment as well.
Sources
This guide is for general education and is not financial, tax or legal advice. Rules and amounts can change; confirm details with the Social Security Administration, the IRS or Medicare. Spotted an error? Let us know.