Retirement Social Security

The 1 Social Security Change You Probably Missed This Year

You could lose up to $1 for every $2 you earn above this amount.

By Lee Huffman

Edited by Laura Hohenstein

Updated Feb. 27, 2026

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Most retirees pay close attention to big Social Security headlines, such as cost-of-living adjustments or changes to maximum benefits. Those updates are easy to spot and widely reported. But smaller technical rule changes often receive far less attention, even when they directly affect your retirement plan.

In 2026, one of those quieter changes could make a meaningful difference if you continue working while collecting Social Security benefits. The retirement earnings test income limits increased this year, and here's everything you need to know about how this impacts your Social Security deposits.

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What is the retirement earnings test?

If you claim Social Security before reaching your full retirement age (FRA) and continue working, the retirement earnings test (RET) limits how much you can earn before some of your benefits are temporarily withheld.

According to the Social Security Administration (SSA), if you are under full retirement age for the entire year, Social Security withholds $1 in benefits for every $2 you earn above the annual limit.

In the year you reach full retirement age, the rule is slightly more generous. Social Security withholds $1 for every $3 you earn above a higher limit, and it only counts earnings through the month before you reach FRA. Once you reach full retirement age, the earnings test disappears completely.

It's also important to understand that withheld benefits are not permanently lost. When you reach full retirement age, your benefit is recalculated to give you credit for the months' benefits that were withheld. Still, the temporary reduction can create cash flow surprises if you're not expecting it.

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The 2026 increase to earnings limits

For 2026, the earnings limits increased, so you can earn more money before your Social Security benefits are reduced. If you are under full retirement age for the entire year, the exempt amount increased from $23,400 to $24,480. In the year you reach full retirement age, the exempt amount increased from $62,160 to $65,160. After you reach full retirement age, your Social Security benefits are not impacted, no matter how much money you make.

The increases are not substantial, but they give younger retirees more room to earn income before their Social Security checks are reduced.

Why this change flew under the radar

This update didn't receive much attention because it was overshadowed by larger headlines about annual cost-of-living adjustment (COLA) adjustments, Medicare costs, and other benefit changes. Earnings test updates are usually buried in technical SSA tables rather than making front-page news.

The dollar changes seem modest compared to other changes, and many media outlets focus more on increases in Social Security deposits than on income thresholds that affect a small percentage of seniors. As a result, retirees who are working part-time may not realize they now have more flexibility.

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Why the increase in the retirement earnings test matters

Today, more retirees continue working in some capacity than in previous generations. While most retirees stop working full-time, they may be earning money by working part-time, taking a seasonal job, or consulting for a former employer or other businesses.

Some retirees continue working by choice, while others do it to offset rising living costs. As wages increase, it becomes easier to unintentionally cross the earnings limit and trigger temporary benefit withholding. A higher exempt amount reduces that risk. Even an extra $1,000 in income can lead to hundreds of dollars being withheld from your Social Security benefits.

How the retirement earnings test impacts Social Security benefits

Consider a 63-year-old collecting Social Security while working part-time and earning $24,000 per year. Under the old $23,400 limit, that person would have exceeded the threshold by $600, resulting in $300 in temporarily withheld benefits. Social Security withholds $1 for every $2 above the annual limit. Under the new $24,480 limit for 2026, that same retiree stays below the threshold and avoids any withholding.

Now imagine someone reaching full retirement age later in the year who earns $64,000 before reaching that milestone. Under the old $62,160 limit, they would have exceeded the threshold by $1,840 and had more than $600 withheld from their Social Security deposits because Social Security withholds $1 for every $3 above the higher limit in that year. Under the new $65,160 limit, no benefits would be withheld from your Social Security income.

These examples show how even modest adjustments to the exempt amount can directly affect your retirement income.

Who is impacted by this change?

This change does not affect anyone who is already past full retirement age. It does not permanently reduce your lifetime benefits, and it does not alter how Social Security benefits are taxed. It also does not increase your base monthly benefit. What it does is raise the income ceiling before temporary withholding applies, giving working retirees more breathing room.

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Bottom line

The increase in the Retirement Earnings Test exempt amounts for 2026 didn't make big headlines, but it can meaningfully affect working retirees. If you're collecting benefits before full retirement age and still earning income, the higher limits may help you avoid unexpected withholding.

Even small rule changes can influence your retirement cash flow and ability to maximize your senior benefits. Staying aware of annual Social Security updates helps you plan more confidently and avoid surprises.

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