After working hard and paying taxes to fund Social Security your whole life, you want to start taking your cut and ease into your Golden Years. But that’s not the reality for many Americans.
Although you can begin collecting Social Security benefits at age 62, many senior citizens say their Social Security income simply doesn’t make ends meet. And that’s not surprising. With stubborn inflation, economic uncertainty and even fears of recession, many retirees are finding themselves in very tense situations.
As a result, many are going back to work or staying in the workforce well into their 60s.
In fact, 19.5 percent of people aged 65 and older participate in the labor force, according to the latest data by the Bureau of Labor Statistics (BLS). And about half a million Americans over the age of 80 are still working, according to research by the Estate Planning & Elder Law Center of Brevard.
You’re not breaking any rules if you’re getting a Social Security check and a job check. But if you work while collecting Social Security checks, your benefits may be reduced.
By how much? That depends on the earnings limit set by the Social Security Administration (SSA) each year, and upon your full retirement age.
What Is the Full Retirement Age?
Full retirement age is 66 years and 10 months if you were born in 1959. And it’s 67 if you were born in 1960 and later.
If you’re collecting Social Security benefits while working in 2026 and have yet to reach your full retirement age, your earnings limit is $24,480. And the government will deduct $1 in benefits for every $2 you earn over that limit.
So let’s say you work a job that earns you $63,000 a year. That is $38,520 over the earnings limit. So that means you lose $19,260 in Social Security benefits for 2026.
But that limit changes in the year you reach retirement age. Let’s say you reach full retirement age in 2026. In that case, the earnings limit increases to $65,160. And the SSA will withhold $1 in benefits for every $3 earned over that limit. That applies until the month you reach full retirement age.
So if you are at full retirement age for part or all of 2026, and you worked and earned $63,000 in 2026, your wages fall below the earnings limit. That means your benefits won’t be affected.
However, any withholding stops the month you reach your full retirement age.
After that, you can work and earn as much as you want, and your Social Security benefits won’t be affected.
If you earned over the limit prior to reach full retirement age, once you reach full retirement age, the SSA moves to raise your monthly benefits so that you recoup the benefits you lost through withholding.
You may be wondering if other sources of income would affect the earnings limit. You can breathe a sigh of relief here as the earnings cap only applies to income from work.
This means the following won’t affect your benefits.
- Withdraws from retirement accounts such as IRAs and 401(k)s
- Pension income
- Capital gains from selling appreciated assets such as stocks, ETFs and mutual funds
- Annuity payments
Nonetheless, even though these sources of income won’t count toward the earnings limit, some may trigger taxation on your Social Security benefits.
Let’s dig deeper.
How Is Social Security Taxed?
Whether your Social Security earnings get taxed depends on your combined income, regardless if you’re working or not.
This is the formula the SSA uses to calculate combined income, sometimes called total income: Combined Income = Adjusted gross income + nontaxable interest + 50 percent of your Social Security benefits.
Here are some examples of income sources that would go into this formula.
- Wages
- Interest
- Capital gains
- Dividends
- Taxable distributions from traditional 401(k)s and IRAs (less adjustments)
- Pension payments
- Gambling winnings
- Municipal bonds
Those filing single who have a combined income of less than $25,000 would face no taxation on their Social Security benefits. But if it falls between $25,000 and $34,000, up to 50 percent of benefits would be taxed. And if it’s over $34,000 or more, up to 85 percent of your benefits will be taxed.
And if those married and filing jointly have combined income below $32,000, there will be no tax burden on Social Security benefits.
But if it is between $32,000 and $44,000, up to 50 percent will be taxed. And if it’s above $44,000, up to 85 percent of benefits would be taxed.
The Bottom Line
Social Security benefits are crucial for many retirees. But for a number of people in today’s reality, they won’t cover everything.
To fill the gap, some people collecting Social Security benefits go back to work or continue working. But this move could trigger a reduction in benefits.
Whether working while also earning a Social Security check is a good idea depends on your unique circumstances. It’s important to be aware of the rules and especially the numbers. This can help you determine how to work and earn Social Security income strategically. You can also discuss your situation with a qualified financial adviser to figure out which path is best for you.
The Epoch Times copyright © 2026. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
