There are plenty of reasons you might end up working while collecting Social Security. First of all, you might file for benefits before you're retired. In fact, you should file for benefits before you're retired if you end up working until age 70 or beyond.

You may also decide to go back to work if you're struggling to pay your retirement expenses and need extra money. Or you may get a job to alleviate boredom.

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Once you reach full retirement age, working while on Social Security won't have any sort of negative impact on your monthly benefits. But before full retirement age, you'll be subject to an earnings test. And it's important to understand what happens if you earn too much.

How Social Security's earnings test works

The Social Security earnings test applies to people who are getting benefits ahead of full retirement age, which is 67 for people born in or after 1960.

If you're younger than full retirement age and won't reach it by the end of 2026, you can earn up to $24,480 from a job without negative consequences. Beyond that, you'll have $1 in Social Security withheld per $2 of earnings.

If you're younger than full retirement age now but will reach that age by the end of 2026, you can earn up to $65,160 from a job without risking withheld benefits. From there, you'll have $1 in Social Security withheld for every $3 of earnings.

Now one thing you should know is that it's only work-related income that counts toward the earnings test. That includes wages from an hourly job, self-employment earnings, or business income.

But withdrawals from a retirement account, dividends, bond or savings account interest, and capital gains do not count as income for earnings test purposes. If you take $25,000 a year out of your IRA, for example, it won't count against you as far as withheld benefits go.

Know what to plan for

Social Security benefits that are withheld for earning too much money aren't lost forever. Once you reach full retirement age, your monthly payments will be recalculated, and you'll get your withheld benefits back in the form of larger checks.

But it's important to know how your earnings might affect your benefits in the near term so you can plan and budget accordingly. The fact that Social Security has an earnings test isn't necessarily a reason not to work. But it's something you need to be aware of to avoid unpleasant financial surprises.