Starting January 2026, the Social Security Administration is raising the earnings limit for people who haven’t reached Full Retirement Age (FRA) yet. Translation: you can make more money from a job or side hustle before your benefits get reduced.
Quick History of the Earnings Test
The earnings test has been around since 1935. It used to be brutal—lose $1 for every $2 you earned over a tiny limit. Over decades, Congress kept loosening it because Americans wanted to keep working. 2026 is the biggest jump in years.
Why This Matters More Than Ever in 2025-2026
Inflation is still high, stimulus checks are long gone, and many 62–66 year-olds need extra income. This change feels like a late stimulus for retirees who aren’t ready to stop working.
How Much Can You Earn in 2026 Without Losing Benefits?
- Under Full Retirement Age (all year): $22,320 (up from ~$22,320 in 2025 – exact 2026 number coming soon but expected higher)
- Year you reach FRA: ~$59,280 (only months before FRA count)
- Month you hit FRA and beyond: Unlimited – no penalty ever!
2025 vs 2026 Earnings Limit Comparison
| Year | Under FRA Limit | Penalty | Year Reaching FRA Limit |
|---|---|---|---|
| 2025 | $22,320 | $1 for every $2 over | $59,520 |
| 2026 | $23,400+ (est.) | $1 for every $2 over | $62,000+ (est.) |
Real-Life Example Table
| Age/Situation | 2025 Max Before Penalty | 2026 Max Before Penalty | Extra Money You Keep |
|---|---|---|---|
| 64, part-time job | $22,320 | ~$23,800 | +$1,480 |
| 66 (FRA in September) | $59,520 (prorated) | ~$62,500 (prorated) | +$3,000+ |
| 67+ (already at FRA) | Unlimited | Unlimited | No change |
Expert Tips to Maximize Your Checks
- Claim at 62 if you need money now—the penalty gets credited back at FRA anyway.
- Bunch income into the year you reach FRA (higher limit).
- Consider Roth conversions or rental income—they don’t count against the limit!
- Talk to a financial planner before December 2025 to reposition 2026 income.
Notable Stats That Will Surprise You
- 1 in 4 new retirees still work at least part-time.
- Average monthly Social Security benefit in 2025: ~$1,920.
- Over 50% of people who trigger the earnings test get every dollar back later.
Frequently Asked Questions (FAQs)
Q: Will I lose benefits forever if I earn too much?
A: No! Any reduced benefits are recalculated and added back once you hit FRA.
Q: Does my side hustle on Etsy or Uber count?
A: Yes, all wages and net self-employment earnings count.
Q: What about investment income or pensions?
A: Those do NOT count against the limit—only earned income.
Final Thoughts – Don’t Leave Money on the Table!
The 2026 Social Security rule changes are one of the few “free lunches” Washington has handed retirees in years. Whether you’re already collecting or thinking about filing soon, mark your calendar and run your numbers. A couple thousand extra dollars a year can feel like another stimulus check—without waiting for Congress to agree!