The Rules Are Changing in 2026 for Working While Collecting Social Security

The Social Security Administration (SSA) is set to make several key adjustments in 2026 that will affect millions of Americans who are still working while collecting their retirement benefits. These updates will change how much you can earn, when benefits are reduced, and how your future payments are calculated.

1. Higher Earnings Limits for Workers

If you’re collecting Social Security before reaching your full retirement age (FRA), the government limits how much you can earn before your benefits are temporarily reduced. In 2026, these earnings limits are increasing.

For people younger than full retirement age for the entire year, the annual limit will rise to about $24,480.
For those who will reach full retirement age during 2026, the higher limit before that month is expected to be around $65,160.
Once you reach your full retirement age, there is no earnings limit, meaning you can earn any amount without your benefits being reduced.

If you earn above the set threshold while under full retirement age, Social Security will withhold $1 in benefits for every $2 you earn over the limit. In the year you reach FRA, the penalty drops to $1 withheld for every $3 over the higher limit.

The good news is that any benefits withheld due to the earnings test are not lost — they are recalculated and added back into your payments after you reach full retirement age.

2. Full Retirement Age Reaches 67 for More Americans

Starting in 2026, the full retirement age officially becomes 67 for everyone born in 1960 or later. This means claiming benefits early — at 62, for example — will result in a larger permanent reduction than for those with a lower FRA.

Working while collecting before 67 can therefore lead to two types of reductions:

The permanent cut for claiming early.
Temporary withholding due to the earnings test.

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Planning when to claim becomes more important than ever to avoid losing a portion of your benefits.

3. 2026 Cost-of-Living Adjustment (COLA)

Social Security benefits will also increase slightly in 2026 due to the annual cost-of-living adjustment, expected to be around 2.8%. This boost helps retirees keep up with inflation but won’t offset reductions for those who earn above the limit while still working.

4. Work Credits and Taxable Earnings Cap

The maximum taxable earnings — the amount of income subject to Social Security tax — will increase to roughly $184,500 in 2026. That means higher-income workers will contribute more in payroll taxes.

Additionally, the amount required to earn one work credit will rise to about $1,890. You can earn up to four credits each year, and a minimum of 40 credits (about 10 years of work) is still required to qualify for Social Security retirement benefits.

5. Why These Changes Matter

For many Americans, retirement no longer means completely leaving the workforce. As living costs rise, more retirees are choosing to work part-time or start second careers.

The 2026 updates are designed to make the system fairer and better aligned with current income levels — allowing people to earn a little more before facing benefit reductions. However, understanding these limits and the impact of early claiming remains crucial for maximizing your lifetime benefits.

Bottom Line

The rules for working while collecting Social Security are evolving in 2026.
Higher earnings thresholds, an official retirement age of 67, and modest COLA increases mean retirees will have a bit more flexibility — but they’ll also need to plan carefully to avoid unexpected reductions.

If you’re approaching retirement age, consider reviewing your income strategy and Social Security claiming plan now, so you can make the most of your benefits under the new 2026 rules.