A lot of people can't wait to retire so they never have to work again. But for some people, working during retirement is a must.
If you don't have savings outside of Social Security, you might need to work to supplement your monthly benefits. This especially holds true if your monthly benefit is in line with today's average, which would put your annual income at about $25,000. And let's be real -- who can live on that?
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But you should know that working while collecting Social Security could affect your monthly benefits. Here's a key rule you must understand if you're planning to hold down a job in retirement or already do.
There's an earnings limit to know about
While you're allowed to work while collecting Social Security, there are earnings limits you must adhere to in order to avoid having benefits withheld. Those limits can change from year to year, but here's what they look like in 2026.
- If you earn more than $24,480, you'll have $1 in Social Security withheld per $2 of income.
- If you'll be reaching full retirement age by Dec. 31 and earn more than $65,160, you'll have $1 in Social Security withheld per $3 of income.
Now, here's an important note. If you've already reached full retirement age and are collecting Social Security, these earnings limits do not apply to you. They only apply to people who have claimed benefits early.
It's also important to know that withheld benefits for earning too much aren't lost for good. Once you reach full retirement age, the Social Security Administration (SSA) will recalculate your monthly payments to make up for whatever amounts you had withheld previously.
But still, from a short-term budgeting standpoint, withheld benefits could be a problem. So it's important to know the rules.
You may want to wait on Social Security if you plan to work
It's not a bad idea to work in retirement. Even if you don't need the money, a job could be beneficial to your mental health and routine.
But one thing you may want to reconsider is filing for Social Security ahead of full retirement age if you plan to keep working a decent amount. Not only might you end up having most or all of your benefits withheld, but claiming Social Security before full retirement age reduces your benefits on a permanent basis. That's not something the SSA will adjust for later.
In other words, let's say you have a portion of your benefits withheld at age 62 because you earned too much money. You'll get that money back later.
But if, in this same scenario, you claimed Social Security at 62 when full retirement age is 67, you'll slash your monthly checks by 30% regardless of whether you work or not. And that reduction won't change once you reach full retirement age.
It's one thing to claim benefits early when you need the money sooner. But if you'll be working a lot, that may not be the case. So think very carefully before you put in that claim.
