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Eliminating Social Security’s “Retirement Earnings Test” - EPIC
The bane of many a retired senior citizen who choses to work after claiming early SS benefits, the so-called “Retirement Earnings Test” is an outdated Social Security rule which is rightly being considered for elimination. The “Senior Citizens’ Freedom to Work Act of 2026” – Senate bill S.4184 – is proposed legislation which would send this now antiquated rule to the Congressional “trash bin,” thus freeing many seniors who choose to work in their 60s from a substantial disincentive to do so. After all, “60 is the new 50” when it comes to senior citizens working.
In this article published by the Economic Policy Innovation Center (EPIC), author Rachel Greszler explains that it is very common now for those in their 60s to continue working. And since seniors can claim SS retirement benefits as early as age 62, they might be tempted (after a long working career) to claim their earned Social Security benefits early to shore up their finances. But Social Security dis-incentivizes seniors to do that by penalizing their SS benefits if they exceed Social Security’s earnings limit for those who collect SS before their full retirement age. Which, by the way, also results in fewer contributions to Social Security at a time when faltering income strains Social Security solvency. Thus, eliminating the “retirement earnings test” is somewhat of a “no brainer” which Congress will hopefully eliminate soon. Read all about it in this article.
For information, elimination of Social Security’s retirement earnings test is also part of a proposal by the Association of Mature American Citizens (AMAC) to reform Social Security to prevent benefit cuts if the program’s Trust Funds are depleted as forecast (in 2032). You can see a summary of AMAC’s proposed Social Security Guarantee here.