If you plan to work and claim Social Security in 2026, here are some important numbers you need to know

Everyone’s retirement plans are different. Some people want to travel more; some want to take up new hobbies or adopt old ones; some want to work on passion projects; and some simply want to enjoy their well-deserved rest. Whatever the case, one thing is true for most retirees: the more money you have, the easier it will be to make these things happen.

And since Social Security plays an important role in most Americans’ retirement finances, many try to do everything they can to maximize their benefits, including working and continuing to earn money even after claiming benefits.

If you apply for Social Security, there is nothing wrong with continuing to earn money. However, if you apply for Social Security before your full retirement age, you’ll need to watch how much you earn, or you could be subject to the Social Security Retirement Earnings Test (RET).

The idea behind Social Security’s RET is to prevent people from collecting full benefits while also earning substantial income from other sources. Specifically, the Social Security Administration (SSA) focuses on earned income, which can come from a paycheck, bonuses, tips, or commissions. Notable income excluded from the calculation includes investment income such as dividends, withdrawals from a retirement account, and pension payments.

If you don’t reach full retirement age in 2026, the earnings limit is $24,480, up from $23,400 in 2025. Earning more than that amount will reduce your benefits by $1 for every $2 above that amount. For example, if you earned $34,480, your benefits would be reduced by $5,000 (the difference of $10,000 divided by 2).

If you reach full retirement age in 2026, the limit is $65,160, up from $62,160 in 2025. Earning more than that amount will reduce your benefits by $1 for every $3 more. In this case, if you earned $71,160, your benefits would be reduced by $2,000 (the difference of $6,000 divided by 3).

Again, it’s important to note that this only applies if you claim Social Security before your full retirement age. If you claim at or after your full retirement age, you can earn as much as you want without having to worry about being subject to Social Security RET.

The only silver lining is that retained earnings are not permanently lost; are postponed. Once you reach full retirement age, the SSA recalculates your monthly benefit so that it gradually returns the amount withheld to you over the rest of your life.

To do this, it takes into account the number of months in which you withheld any benefits and then adjusts your benefit as if you claimed it later than you actually did. As a result, the program effectively increases your monthly benefit in the future to credit you with the amount withheld.

When people retire mid-year, there is a chance that they have already earned above the RET threshold. If typical RET rules were applied, many people would see their benefits significantly reduced. To avoid that situation, Social Security offers a special rule for the first year that looks at your monthly income instead of your annual income.

To be considered, your monthly income must be $1,950 or less when you are under your full retirement age for that entire year.

For example, let’s say a person retires in September after earning $50,000 during the first nine months of the year. Although this is above the RET limit, you can still receive your full checks for October, November and December if your monthly income in those months remains at $1,950 or less.

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If you plan to work and claim Social Security in 2026, here are some important numbers you need to know originally published by The Motley Fool