Key Points
The Social Security earnings test can result in some of your benefits being withheld if you keep working.
The earnings test has annual income limits that apply to Social Security beneficiaries under full retirement age.
If you retire in the middle of the year, there’s a special rule that ensures the earnings test won’t apply after you stop working.
If you work and collect Social Security benefits at the same time, some or all of your benefits can be withheld if you earn more than a certain amount of money. This is known as the Social Security earnings test.
But what if you retire in the middle of the year? Can you still collect your Social Security benefit? What if you earned more than the Social Security earnings test limit before you leave your job? Here's what all mid-year retirees need to know.
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The Social Security earnings test
If you have already reached full retirement age when you start collecting Social Security, you have nothing to worry about. Regardless of how much money you earn from working, you can collect your entire Social Security benefit.
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On the other hand, if you have not yet reached full retirement age but are still working, some or all of your benefits can be withheld if your earnings exceed a certain threshold.
For 2026, there are two different "earnings tests" that could apply:
- If you will reach full retirement age after 2026, you can earn up to $24,480 with no impact on your benefits. $1 in benefits will be withheld for every $2 over that limit.
- If you will reach full retirement age during 2026, you can earn up to $65,160 ($5,430 per month) with no impact, and $1 will be withheld for every $3 over the limit. Only months before you reach full retirement age count.
What if you retire mid-year?
Consider this scenario. Let's say you turn 65 in June 2026, so you'll be under full retirement age for the entire year (Note: Full retirement age is 67 for those born in 1960 or later). You earn $8,000 per month, or $96,000 per year, from your job. If you retire on June 1 and file for Social Security, you'll have earned $40,000 for the year -- well over the earnings test limits. So, will any benefits be withheld?
The Special Earnings Limits Rule
Fortunately, there's a special rule that applies if you retire mid-year, known as the Special Earnings Limit Rule.
In simple terms, this rule states that you can collect a full Social Security check for every month you are considered retired, regardless of your full-year earnings. So, in a situation like the one described above, someone who retires in June wouldn't have to worry about any of their benefits being withheld, regardless of their total annual earnings.
What's more, the SSA considers you to be "retired" if your monthly earnings are $2,040 or less. So, this means that even if you continue working but drop to a "part-time" status, you might still be able to collect your full Social Security benefit even if your full-year 2026 earnings significantly exceed the limit.
The bottom line is that if you retire in the middle of the year and haven't reached full retirement age, you don't have to worry about your benefits being withheld due to the earnings test.
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