Social Security’s Earnings Test Goes Away at Full Retirement Age. Here’s Why You Might Still Lose Some of Your Check
Reaching full retirement age lifts Social Security’s earnings test, but working retirees who breathe a sigh of relief may find their checks shrinking for an entirely different reason.
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If you’re going to work while collecting Social Security, you may want to wait until full retirement age (FRA) to sign up for benefits or start earning money from a job.
FRA is 67 for anyone born in 1960 or later. At that age, you’re entitled to your monthly Social Security benefits without a reduction. You can also earn any amount of money from a job without being subject to Social Security’s earnings test.
The earnings test limits the amount of money you can make from a job before Social Security benefits are withheld. In 2026, people who won’t reach FRA by the end of the year risk having $1 in Social Security withheld per $2 of earnings above $24,480.
Withheld benefits are not lost forever. They’re returned in the form of larger checks once FRA arrives. But in the near term, the earnings test can cause problems, which is why it’s a good thing that it goes away at FRA.
But just because there’s no longer an earnings test at FRA doesn’t mean you’ll get to keep your Social Security benefits in full. You may end up losing a portion of those checks due to another reason — taxes.
How taxes on Social Security work
Taxes on Social Security benefits don’t hinge on how old you are or your filing age. They depend on your provisional income.
Provisional income is calculated as the total of your adjusted gross income, tax-exempt interest income, and 50% of your annual Social Security benefits.
If that total reaches $25,000 and you file taxes as someone who’s single, up to 50% of your Social Security benefits may be subject to federal taxes. If your tax filing status is married filing jointly, up to 50% of your Social Security benefits may be taxed if your provisional income is $32,000.
The pain doesn’t end there. If you’re single, a provisional income above $34,000 means you could owe taxes on up to 85% of your Social Security benefits. The same applies if you’re married filing jointly with a provisional income over $44,000.
These income thresholds have not been adjusted for inflation in decades. So it doesn’t take much income to lose a chunk of your Social Security check.
There’s a reprieve for many right now, but it’s temporary
If you’re a Social Security recipient with a moderate income, you may not have to pay taxes on your benefits right now. Thanks to the $6,000 senior deduction included in the One Big Beautiful Bill Act, many older Americans are currently exempt from paying taxes on their Social Security checks.
But that $6,000 deduction is set to expire in 2028. So even if you’re off the hook now, taxes on your benefits could return in a few years. And that’s something to prepare for.
It’s great that once you reach FRA, you can earn any amount of money without having to stress about Social Security’s earnings test. But do be aware that you might still lose money to taxes, even if your job isn’t the issue.
If you want to avoid paying taxes on Social Security, be strategic with retirement plan withdrawals to keep your income below the applicable limit. You may also want to look at a Roth conversion, since Roth account withdrawals don’t count toward provisional income.
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