Many people expect to keep working after they retire, so it helps to understand how working and Social Security benefits interact.
Some continue working for income. Others want structure, purpose, social connection, or the chance to stay active in a profession or business they enjoy.
That raises an important question: How will working affect Social Security benefits?
The answer depends on three key ideas: full retirement age, the earnings test, and taxable benefits.
At True North Wealth Management, we help clients understand how Social Security fits into their broader retirement income strategy.
Full Retirement Age
Social Security does not require everyone to retire at the same age.
You can generally begin receiving retirement benefits as early as age 62. You can also delay benefits up to age 70, which may increase your monthly benefit.
Full retirement age is the age when you become eligible for 100% of your Social Security retirement benefit. For people born in 1960 or later, full retirement age is 67.
Claiming before full retirement age usually reduces your monthly benefit. Delaying beyond full retirement age can increase it.
The Earnings Test
If you claim Social Security before full retirement age and continue working, the Social Security earnings test may apply.
For 2026, if you are under full retirement age for the entire year, Social Security withholds $1 in benefits for every $2 you earn above $24,480.
In the year you reach full retirement age, a higher limit applies. For 2026, Social Security withholds $1 in benefits for every $3 you earn above $65,160, but only earnings before the month you reach full retirement age count.
Beginning with the month you reach full retirement age, your Social Security benefit is no longer reduced because of your earnings.
A Simple Example
Assume you reach full retirement age in 2026 and earn $70,000 before the month you reach that age.
The 2026 limit is $65,160.
That means your earnings exceed the limit by $4,840. Social Security would withhold $1 for every $3 over the limit, or about $1,613 in benefits.
This reduction does not apply after you reach full retirement age.
Withheld Benefits Are Not Always Gone Forever
The earnings test can feel like a penalty, but benefits withheld before full retirement age may increase future monthly benefits after full retirement age.
The rules can be confusing, so it is important to understand how the timing of work and benefits may affect both current income and future Social Security payments.
Taxable Social Security Benefits
Once you reach full retirement age, working no longer reduces your Social Security benefit. However, income from work can still affect taxes.
Social Security benefits may be taxable depending on your combined income.
For married couples filing jointly, if combined income is between $32,000 and $44,000, up to 50% of Social Security benefits may be taxable. If combined income is more than $44,000, up to 85% of benefits may be taxable.
For single filers, the thresholds are lower.
This does not mean you lose 85% of your benefit. It means up to 85% of the benefit may be included in taxable income.
Coordinate Work, Benefits, and Taxes
Working in retirement can be a smart choice, but it may affect cash flow, taxes, Medicare premiums, retirement withdrawals, and Social Security timing.
Before claiming benefits while still working, consider:
- Your full retirement age
- Your expected earnings
- Your health and family longevity
- Your tax situation
- Your spouse’s benefit
- Other retirement income sources
- Whether you need the income now
- The impact of delaying benefits
At True North Wealth Management, we help clients review Social Security decisions as part of a complete retirement plan.
The goal is not simply to claim early or late. The goal is to coordinate Social Security with your income needs, tax picture, investments, and long-term financial goals.
Related Reading
- Deciding When to Take Social Security
- 9 Facts About Social Security
- When Should I Start Taking Social Security?
- Learn about our retirement planning services
Important Disclosures:
This material is for informational purposes only and is not intended as tax, legal, Social Security, retirement, accounting, or individualized financial advice. Social Security rules, earnings limits, benefit formulas, taxation thresholds, and retirement planning considerations may change. True North Wealth Management does not provide tax or legal advice. Consult the Social Security Administration and qualified tax, legal, and financial professionals regarding your circumstances.
The Social Security Administration confirms the 2026 earnings test limits: $24,480 for beneficiaries under full retirement age all year and $65,160 for those reaching full retirement age during 2026, with no earnings limit beginning the month full retirement age is reached.
1. EBRI.org, 2025
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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.