Retirement Social Security

Working in Retirement? Waiting Until This Age Keeps Your Social Security Checks Safe

Understanding how earning wages impacts Social Security could help you avoid a big mistake.

By Maurie Backman , Edited by Laura Hohenstein

Updated June 1, 2026

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One of the biggest money mistakes retirees make is assuming Social Security will cover their expenses in full. The reality is that if you earn a typical salary during your working years, Social Security might only replace about 40% of it once you retire.

But when you do the math from there, it means that retiring on Social Security alone could translate into taking a 60% pay cut. That could mean having to cut back on discretionary expenses like entertainment, which may be a tough thing to do at that stage of life.

Working as a retiree is a great way to supplement your Social Security checks and avoid having to give up the things you love, but it's important to know how earning wages impacts your monthly benefits.

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How Social Security's earnings test works

If you're collecting Social Security benefits, you're allowed to earn money from a job at the same time. But if you have not yet reached full retirement age (FRA), you'll be subject to an earnings test if you work.

And it doesn't matter if that work is part-time wages on a preset schedule, freelance income, or earnings from a business you start. All earned income counts toward the earnings test. What doesn't count, however, is passive income like dividends, interest, and other investment income. Withdrawals from your retirement savings don't count either.

The limit of the earnings test changes yearly. In 2026, you'll have $1 in Social Security withheld per $2 of income above $24,480 if you won't reach FRA by Dec. 31. If you'll reach FRA by the end of the year, you'll have $1 in Social Security withheld per $3 of income above $65,160.

Benefits that are withheld for earning too much money aren't lost forever. Once you reach FRA, your monthly payments should be recalculated to account for that missing money, and you should see your checks increase. But in the near term, your checks could shrink substantially based on your wages.

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It pays to wait until FRA to work while on Social Security

Since Social Security's earnings test does not apply once you reach FRA, it could pay to wait until that point to get a job if you're collecting benefits. FRA is 67 for anyone born in 1960 or later.

That said, you may not be able to wait that long. If you filed for benefits at 62 and realize you can't get by on those monthly checks alone, you may not be able to wait until age 67 to start working to supplement those checks.

However, some people work in retirement more so to alleviate boredom than because they absolutely need the money. If you're in that situation, you may want to hold off on working until FRA if you're collecting benefits, so you don't have to worry about the earnings test.

Your working plans should be a part of your Social Security claiming decision

If you know you intend to keep working in retirement, that should play a role in helping you decide when to claim Social Security, just as other factors should be part of that decision. Those include your health, your level of savings, and your retirement income needs.

Imagine you're about to file for benefits at 62, but you also intend to work 20 hours a week at your current job that pays $80,000 a year. If you'll be earning $40,000 a year, it means you'll be beyond the earnings test limit this year, and most likely in the next few years, too.

In that case, it could pay to hold off on Social Security, since filing before FRA will result in permanently reduced benefits. And if $40,000 isn't enough to live on, a compromise could be to see if your employer will allow you to work enough hours to earn, say, $50,000 a year. That, combined with reducing some spending, could be a solution until FRA arrives.

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What to do if you can't avoid the earnings test

It may be that you can't wait until FRA to claim Social Security, and you also have to keep working to supplement your benefits. If so, you might still be able to avoid having benefits withheld.

For one thing, you could always keep your income right below the earnings test threshold each year. Just be sure to see what that limit entails, since it can change annually.

Another option is to defer income the year you reach FRA. Once you get to FRA, the wages you earn are not subject to the earnings test. So if you're a freelancer, for example, and you'll be reaching FRA in July, you can try limiting your earnings from January through June and then ramping up on work from July through December.

Bottom line

If you don't have a lot of retirement savings, or any, you may find that Social Security isn't enough to live on. And if so, you may decide that working is your best (and possibly only) option for supplementing your monthly benefit checks.

It's important to understand how the earnings test works so you don't end up with an unwanted financial surprise. And depending on your situation, it could pay to either wait until FRA to start working while on Social Security or wait until that age to claim benefits altogether.

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