This Social Security rule change could halt your benefit payments — what you can do to minimize impact in 2027

Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.

Social Security has, quite simply, a lot of rules. For beneficiaries, understanding those rules can be vital since they impact how much income they ultimately receive.

However, some of the rules governing Social Security benefits are complicated and making the wrong choice could be disastrous for some Americans.

Top Picks

Such is the case for the retirement earnings test (1) (RET), a policy that applies to anyone who claims Social Security before their full retirement age (2) (FRA). For anybody born in 1960 or later, the FRA is 67.

The RET determines how much income you can earn from working while collecting Social Security before you reach your FRA.

In order to apply the RET, the Social Security Administration asks you to report your earnings (3) once you start collecting benefits. If you’re below your FRA and your earnings go above a certain level, you start to see your benefits reduced. The amount you forfeit depends on your earnings and whether you reach FRA at any point during the year.

In some cases, you could end up with no retirement benefits at all.

Since the RET can lead to paused or temporarily reduced benefits, the stakes are very high for the older Americans who rely on them. That’s why learning about upcoming changes to the RET is so important, as well as how they could impact you.

How much could you lose from your Social Security checks?

The amount that you forfeit (4) from your Social Security checks depends on your earnings and your age. In 2026, the following rules apply:

• You lose $1 in benefits for every $2 earned above $24,480 if you don’t reach FRA at some point during the year.

• You lose $1 in benefits for every $3 earned above $65,160 if you do reach FRA at some point during the year, but you haven’t done so yet.

But it’s worth noting that the rules change most years, as the amount you can earn without impacting benefits increases due to inflation. The year 2027 is no different:

• Retirees who won’t hit FRA at some point in the year can earn up to $25,560 without forfeiting any benefits, after which time they lose $1 for every $2 earned.

• Retirees who will hit FRA at some point in the year can earn up to $67,920 before losing $1 in benefits for every $3 earned.

This is an improvement from 2026, although it still leaves many beneficiaries at risk of benefit checks being reduced once they’ve earned a relatively modest amount. In fact, some lawmakers have called for repealing this rule (5), but no legislative changes have yet occurred.

Subscribe to Moneywise: Get Warren Buffett’s best investing lessons in 1 free guide

You don’t necessarily lose the benefits forever

The good news about the RET is that you don’t necessarily lose the benefits forever. When you reach your FRA, your monthly payment amount is adjusted (6) according to how much income you forfeited earlier.

Specifically, you’re credited back any early filing penalties for months when your benefits were reduced or cut entirely because your income was too high after starting benefits before your FRA (2).

The problem is that it often results in just a very slight increase to your monthly benefits, so you do get back the money you lost — but you only get it slowly over time. And if you don’t live long enough to recoup the withheld benefits through those payments, then that money is lost for good.

The RET also means that early retirees can’t really expect to rely on both Social Security and a paycheck to support them. For this reason, anyone who does want to retire early might have to plan ahead by saving and investing to support themselves during the early years of their retirement.

Here are a few ways to make that happen.

Make your investing automatic

Getting into the habit of making regular investments can help you build a nest egg that supports you if you retire before you reach your FRA. For instance, investing only $25 a week for 30 years means putting in a total of $39,000 over that time. At a hypothetical 7% annual return, this sum could grow to $126,966 (7) before fees and taxes.

One way of making this process even easier is if you automate it with a platform like Acorns, an app that automatically invests your spare change, so you don’t have to.

Here’s how it works: Just sign up and link your debit or credit cards and Acorns will round up each purchase to the nearest dollar, investing the difference into a diversified portfolio managed by experts at leading firms like BlackRock and Vanguard.

That morning coffee for $3.25? It’s now a 75-cent investment in your future. Then, once you’re comfortable with Acorns rounding up your purchase, you can supercharge your savings with recurring monthly deposits into your favorite funds.

Plus, if you sign up today, Acorns will add a $20 bonus to help you begin your investment journey.

Choose the right investments

Of course, the better your investments perform, the more wealth you can build for your retirement. To maximize your chances of successfully growing your nest egg, it could help to invest in a diverse range of assets, including those that tend to perform well during periods of inflation.

For instance, institutional investors have long turned to private-market real estate to gain exposure to assets that can provide tax benefits, offer steady cash flow, serve as a hedge against inflation and earn returns that aren’t strongly correlated with public equities.

But individual investors haven’t historically had great options for accessing high-quality, private-market real estate — until recently. Crowdfunding platforms have opened access to a broader demographic, although outcomes often depend on factors like deal structure, platform incentives and the expertise of the sponsor.

Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.

Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.

With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.

Get the right financial advice

In many cases, it’s helpful to work with a financial advisor to help you create a retirement investing plan that gives you the income you need by your target retirement date.

This is especially true for investors with larger portfolios, when financial decisions can become increasingly nuanced. Managing withdrawals, minimizing tax exposure and ensuring long-term sustainability often require greater coordination and strategic planning.

In these cases, working with a financial advisor can help reduce costly mistakes.

If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.

Simply answer a few questions about your savings, retirement timeline and overall investment portfolio. From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.

You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.

WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed.

What To Read Next

Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

Social Security Administration (1), (2), (3), (4); Congress.gov (5); AARP (6); Acorns (7)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.