Once you reach full retirement age, you can earn as much as you want after retirement on Social Security without losing a dollar of benefits. Before that age, an earnings test kicks in: in 2026, wages above $24,480 trigger temporary withholding of some of your benefit. Two other rules run in parallel and use different income measures, one that decides how much of your Social Security gets taxed, and one that decides whether you pay a Medicare premium surcharge. Crossing one threshold doesn’t mean you’ve crossed the others.
The 2026 Earnings Limits Before Full Retirement Age
If you claim Social Security before your full retirement age, the earnings test has two versions depending on how close you are to that birthday.
If you won’t reach full retirement age at any point in 2026, the limit is $24,480. Social Security withholds $1 in benefits for every $2 you earn above it. Earn $30,480 for the year, and $3,000 in benefits get withheld.1Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
If you will reach full retirement age during 2026, a higher limit applies to the months before your birthday month: $65,160, with $1 withheld for every $3 above it. Starting the month you actually hit full retirement age, the test disappears entirely.1Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
Full retirement age is between 66 and 67 depending on when you were born. Anyone born in 1960 or later has a full retirement age of 67.2Social Security Administration. Normal Retirement Age
What Counts as Earnings
The earnings test looks only at wages from a job and net income from self-employment. Bonuses, commissions, and vacation pay count. Pensions, annuities, investment income, interest, veterans benefits, and other government retirement payments do not.3Social Security Administration. What Happens if I Work and Get Social Security Retirement Benefits?
This distinction matters. You could pull $100,000 from a traditional IRA or collect $50,000 in dividends without triggering a single dollar of benefit withholding. Only a paycheck or self-employment profit counts. If your retirement income comes primarily from savings and investments, the earnings test is effectively irrelevant to you regardless of age.
The Special Monthly Rule for Your First Year
Retiring mid-year often means your wages from the months you were still working already exceed the annual limit. Social Security handles this with a special rule that applies in the first year of retirement: you can get a full benefit for any whole month you’re considered retired, no matter what you earned before you stopped working.4Social Security Administration. Receiving Benefits While Working
For someone under full retirement age in 2026, the monthly threshold is $2,040. Earn less than that in a given month, and Social Security treats you as retired for that month and pays the full check. Someone who earned $80,000 in the first half of the year won’t lose benefits in the six months after they stop working. The special rule typically applies once, in the year you first claim.
After Full Retirement Age: No Limit at All
Once you hit full retirement age, you can earn any amount and keep your full benefit. No test, no withholding, no cap.
Benefits withheld earlier under the earnings test aren’t lost. When you reach full retirement age, Social Security recalculates your monthly payment to credit you for every month benefits were reduced or withheld, producing a permanently higher check going forward.4Social Security Administration. Receiving Benefits While Working Social Security also reviews your earnings record every year, and if a recent working year ranks among your highest 35, your benefit gets recalculated upward automatically.
The earnings test, in other words, is closer to a deferral than a penalty. Smaller checks now, larger checks later, designed to roughly break even over an average lifespan.
How Much of Your Benefit Gets Taxed
A separate rule determines whether your Social Security benefit becomes taxable income. The IRS uses “combined income,” calculated by adding your adjusted gross income, any tax-exempt interest, and half of your annual Social Security benefits.5Social Security Administration. Must I Pay Taxes on Social Security Benefits?
For single filers:
- Below $25,000: benefits are not federally taxed.
- $25,000 to $34,000: up to 50 percent of benefits become taxable.
- Above $34,000: up to 85 percent of benefits become taxable.
For married couples filing jointly:
- Below $32,000: benefits are not taxed.
- $32,000 to $44,000: up to 50 percent of benefits become taxable.
- Above $44,000: up to 85 percent of benefits become taxable.
These thresholds have not been adjusted for inflation since they were set in 1984 and 1993, so more retirees cross them each year. A couple with a modest pension, some investment income, and two Social Security checks can land in the 85 percent bracket without feeling wealthy.
Two details catch people off guard. Municipal bond interest is tax-exempt for regular income tax purposes but gets added back into combined income. And traditional IRA and 401(k) withdrawals count as adjusted gross income and flow directly into the formula; Roth IRA withdrawals generally do not.
How Income Affects Your Medicare Premium
High income in retirement can also raise your Medicare costs through the Income-Related Monthly Adjustment Amount, or IRMAA. It applies to Medicare Part B and Part D, and Social Security determines it using your modified adjusted gross income from the tax return filed two years earlier. For 2026 premiums, that’s your 2024 return.6Social Security Administration. Medicare Annual Verification Notices – Frequently Asked Questions
The standard 2026 Part B premium is $202.90 per month for single filers with modified adjusted gross income of $109,000 or less, or $218,000 or less for joint filers.7Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles Above those numbers, Part B premiums climb through five surcharge tiers, reaching $689.90 per month for single filers at $500,000 or above and joint filers at $750,000 or above. Part D adds a smaller tiered surcharge starting at $14.50 per month on top of your plan’s regular premium. Both surcharges come out of your Social Security check before it reaches you.
Because IRMAA looks back two years, a one-time income spike can raise your premiums well after the money is gone. Selling a rental property, doing a large Roth conversion, or cashing out stock options in a single year can push you into a higher tier two years later.
Appealing IRMAA After Retirement
If your income has dropped since the tax year Social Security used, you can ask for the surcharge to be reduced or removed. Qualifying life-changing events include marriage, divorce, or death of a spouse; work stoppage or reduced hours for you or your spouse; loss of income-producing property due to disaster, fraud, or theft; loss of pension income from a plan termination or reorganization; and an employer settlement payment from a bankruptcy or reorganization.
File Form SSA-44 with documentation of the event and your current or expected income.8Social Security Administration. Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event (Form SSA-44) Retirement itself counts as work stoppage, so if you were still employed during the lookback year, you likely qualify.
Reporting Earnings and Handling Overpayments
Social Security reviews earnings records each year to check whether beneficiaries exceeded the earnings test limits. If your actual earnings came in higher than the estimate on file, the agency treats the difference as an overpayment and recovers it, typically by withholding 10 percent of your monthly benefit, or $10, whichever is greater.9Social Security Administration. Overpayments
You can ask for a lower monthly withholding if the standard rate creates hardship, though it can’t drop below $10. If you believe the overpayment wasn’t your fault and repaying it would be unfair or cause hardship, you can request a full waiver by filing Form SSA-632, and there’s no deadline for that request. Intentionally failing to report earnings above the limit can bring a penalty on top of the overpayment.10Social Security Administration. When to Assess a Penalty for Late Reports Give Social Security an accurate estimate of your expected earnings when you first claim, and update it promptly when your work situation changes.
State Taxes on Benefits
Most states don’t tax Social Security. As of 2026, eight do to some degree: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. Each sets its own income thresholds and exemptions, and several exempt benefits entirely below certain income levels. If you live in one of these states and are weighing whether to keep working, the state tax adds another layer to the math.