For many people, retirement signifies the end of working. But for a lot of seniors, working in retirement makes financial and emotional sense.
There are plenty of people who reach retirement without much of a nest egg. Working is a great way to generate extra income and make up for a smaller IRA or 401(k).
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Working can also make sense for retirees who don't necessarily need money, but also don't want to get bored. It can be tricky to go from a full-time career to an unstructured schedule. So some seniors opt to work just to have something to do and a reason to leave the house.
Plus, retirement can be lonely for people who don't have a large family or social network. Taking a job could mean getting a chance to meet different people and make new friends.
If you're retired and collecting Social Security, you should know that you're absolutely allowed to hold down a job at the same time. But if you haven't yet reached full retirement age, which is 67 for anyone born in 1960 or later, you'll need to be mindful of Social Security's earnings test. The earnings test dictates how much money you can earn from a job before having benefits withheld.
The good news is that Social Security's earnings-test limits are increasing in 2026. Here's what you need to know.
Introducing the new earnings-test limits
One misconception about Social Security's earnings test is that if you exceed its limits, you'll lose out on benefits permanently. What actually happens if you exceed the earnings-test limits is that benefits are withheld, but then repaid to you once you reach full retirement age.
You won't get the money back in one lump sum. Rather, you'll get it in the form of larger monthly benefits.
Social Security's earnings test only applies to people who collect benefits prior to reaching full retirement age. So if you're 68 years old and working three days a week while collecting benefits, you don't have to worry about earning too much.
Social Security's earnings-test limits also tend to increase from year to year. And 2026 is no exception.
Next year, the earnings-test limit is rising from $23,400 to $24,480 for people who are under full retirement age and won't reach it at any point in 2026. From there, $1 in Social Security is withheld per $2 of earnings.
Next year's earnings-test limit is different for people reaching full retirement age in 2026. The limit is rising from $62,160 to $65,160. From there, $1 in Social Security is withheld per $3 of earnings.
Let's say you won't be reaching full retirement age until August 2026, but you plan to work and collect benefits starting in January. In that case, you'll have to be mindful of the earnings test, but you have a pretty high threshold to top -- $65,160 -- before having benefits held back due to working.
Don't let the earnings test stop you from working
If you have a good reason to work in retirement, whether it's financial or otherwise, don't let the fact that the earnings test exists stop you from doing what's best for you.
You may be worried about having benefits withheld. But remember, you're not losing that money permanently. And if you're subject to having benefits held back, it means you're probably earning a substantial-enough sum to make up for it.
That said, if you don't want to deal with having any Social Security withheld, remember next year's earnings-test limits and aim to keep your income just below whichever threshold applies to you. This may be especially feasible if you'll be working on a freelance basis and have control over your hours. But even if not, if you explain your concerns, your employer may be willing to work with you to cap your earnings at a certain level.
