What Is a Social Security Earnings Test?
Social Security Earnings Test — also called Retirement Earnings Test, Annual earnings test
A Social Security rule that can temporarily withhold retirement benefits when you claim before full retirement age and earn over annual limits.
Official source: ssa.gov
What is the Social Security Earnings Test?
The Social Security Earnings Test can temporarily reduce retirement or survivor benefits if you claim them before Full Retirement Age (FRA) and continue working.
It does not permanently take benefits away. SSA can recalculate your benefit at Full Retirement Age to account for months when benefits were withheld.
What are the 2027 earnings limits?
For 2027:
- If you are under Full Retirement Age for the entire year, the earnings limit is $25,560.
- If you reach Full Retirement Age during 2027, the higher limit is $67,920 for earnings before the month you reach FRA.
- Beginning with the month you reach Full Retirement Age, there is no earnings limit.
If you are under FRA all year, SSA generally withholds $1 in benefits for every $2 you earn above the limit.
In the year you reach FRA, SSA generally withholds $1 for every $3 you earn above the higher limit before the month you reach FRA.
What income counts?
The earnings test generally counts:
- Wages from a job.
- Net earnings from self-employment.
- Bonuses, commissions, and vacation pay.
It generally does not count income such as:
- Pensions.
- Annuities.
- Investment income.
- Interest.
- Veterans benefits.
- Other government or military retirement benefits.
What happens at Full Retirement Age?
The earnings test stops beginning with the month you reach Full Retirement Age.
After that, you can earn any amount from work without having Social Security retirement benefits withheld because of the earnings test.
SSA can also recalculate your retirement benefit to account for months when benefits were withheld before Full Retirement Age.
What if you retire in the middle of the year?
A special monthly rule can sometimes apply during the first year you receive retirement benefits.
This rule can allow SSA to pay a full benefit for certain months you are considered retired even if your total annual earnings exceed the yearly limit.
In real life
- A 63-year-old receiving retirement benefits earns $30,000 in 2027. Because that is above the $25,560 limit, SSA may temporarily withhold part of the person's benefits.
- Maria is 64, receives Social Security retirement benefits, and earns $28,000 in 2027. SSA may withhold some benefits because her earnings exceed the $25,560 annual limit.
- Tom claims retirement benefits at 62 and continues freelancing. His net self-employment earnings count toward the Social Security Earnings Test until he reaches Full Retirement Age.
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Frequently asked questions about Social Security Earnings Test
What is Social Security Earnings Test?+
The Social Security Earnings Test can temporarily withhold retirement or survivor benefits if you claim before Full Retirement Age and earn more than the annual limit.
What is the Social Security earnings limit for 2027?+
In 2027, the limit is $25,560 if you are under Full Retirement Age all year. If you reach Full Retirement Age during 2027, the higher limit is $67,920 for earnings before the month you reach FRA.
How much does Social Security withhold if I earn over the limit?+
If you are under Full Retirement Age all year, SSA generally withholds $1 for every $2 you earn above the limit. In the year you reach FRA, it generally withholds $1 for every $3 above the higher limit before the month you reach FRA.
Does the earnings test stop at Full Retirement Age?+
Yes. Beginning with the month you reach Full Retirement Age, there is no earnings limit and SSA does not withhold retirement benefits because of work earnings.
What income counts toward the Social Security Earnings Test?+
Wages and net self-employment income generally count. Pensions, annuities, investment income, interest, veterans benefits, and other government or military retirement benefits generally do not.
Source: ssa.gov
