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Working Could Temporarily Suspend Your Social Security Payments - MSN - Finance Buzz Money
It is very common for someone to retire at age 62 and then decide to go back to work. Social Security allows you to keep working while you collect benefits, but the amount you can earn is limited. The earnings limit for 2026 is $24,480. If you go over this limit, Social Security starts withholding $1 for every $2 you earn over it. This limit tends to increase each year; in 2027, the earnings limit is $25,560. Beginning in the year you reach your FRA, the earnings limit almost triples! The amount you are allowed to earn before the month you reach your FRA is $65,160 for 2026 and $67,920 for 2027. The earnings limit ends on the 1st of the month you reach your FRA. If you are born on the 1st of any month, it ends the month before, as Social Security considers you born the day before.
The earnings limit is based on your gross income; if you receive a W-2, use Box 3 on your W-2, before any reductions. If you are self-employed, it is based on your net income.
There are special rules for the self-employed in their first year of retirement. In the first year a self-employed person starts taking benefits and has not yet reached their FRA, they are also subject to an hourly limit. The hourly limit only allows you to work 15 to 45 hours per month and is limited to no more than 15 hours if you are highly skilled. The monthly limit applies only to your first year of retirement; beginning the following year, you are only subject to the annual earnings limit.
If you have any payments withheld for exceeding the earnings limit, Social Security will re-add any withheld monthly payments and recalculate your benefit as if you retired that many months later, and increase your benefit amount to account for them. In reality, it is not really a penalty, since you did not lose any benefits. However, you do have to live long enough to collect the full withheld amount.
David Manning, CPA, has written an article on this topic.
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.