Workers who collect Social Security before reaching full retirement age will have $1 withheld for every $2 they earn above $25,560 in 2027, the Social Security Administration (SSA) says in its 2027 cost-of-living fact sheet. In the calendar year a person reaches full retirement age, the limit rises to $67,920 and the withholding eases to $1 for every $3 over. Once the month of full retirement age arrives, there is no limit at all.
What are the 2027 limits, exactly?
SSA’s fact sheet, which also announces a 3.6 percent cost-of-living adjustment for 2027, lists three tiers. For people under full retirement age all year, the annual exempt amount is $25,560, or $2,130 a month. For the year a person reaches full retirement age, it is $67,920, or $5,660 a month. Beginning the month full retirement age is attained, the fact sheet lists none.
Both figures are higher than this year’s. SSA’s own guide, How Work Affects Your Benefits, gives the 2026 limits as $24,480 and $65,160. That makes the 2027 under-full-retirement-age limit $1,080 higher, and the full-retirement-year limit $2,760 higher.
Full retirement age is 67 for anyone born on or after Jan. 2, 1960, according to the same guide. A person who claimed at 62 and is still working, or who claimed at 64 and took a part-time job, is the reader the lower limit is written for.
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What does $1 for every $2 look like in a paycheck?
The math is simple but the surprise is large. A worker under full retirement age all year who earns $35,560 in 2027 is $10,000 over the $25,560 limit, so SSA would hold back $5,000 of benefits. Someone who earns $77,920 in the year they reach full retirement age is $10,000 over $67,920, and $1 for every $3 means $3,333 would be withheld.
The test looks only at work income, and it looks at it for the whole year, which is why a bonus or a late-year contract can change the answer. The 2027 limit is an annual figure, and SSA lists a monthly equivalent of $2,130 alongside it.
The same fact sheet carries other 2027 work-related figures. It lists $1,770 a month as substantial gainful activity for disability beneficiaries who are not blind, $2,950 for those who are blind, and a $1,970 quarter of coverage. Those apply to disability benefits and work credits, not to the retirement earnings test described here.
Which earnings count, and which do not?
Only work income counts. SSA’s guide says that for someone who works for an employer, only wages count toward the earnings limits, including bonuses, commissions and vacation pay. For the self-employed, net profit from the business is what counts.
Pensions, annuities, investment income and interest do not count, and neither do veterans or other government or military retirement benefits. SSA’s guide adds that wages are counted in the year they are earned, not the year they are paid, while self-employment income counts when it is received.
The guide also describes a special rule for the first year of retirement. A person can receive a full benefit for any whole month they are considered retired, no matter how much they earned for the year. For someone under full retirement age all year in 2026, the guide says a month counts as retired if earnings are $2,040 or less.
Is the withheld money lost for good?
No. SSA says benefits withheld because of the earnings test are not gone: at full retirement age, the agency recalculates the benefit to give credit for the months it reduced or withheld benefits. The monthly check then rises, so the money comes back over time in a larger payment.
There is one exception worth knowing. SSA’s guide says spouses and survivors who are caring for minor or disabled children do not receive that increase for months withheld because of work. For them, the withholding is closer to a permanent cost than a loan against the future.
The test also stops mattering at a clear moment. Beginning the month a person reaches full retirement age, earnings no longer reduce benefits, however large they are.
How does a worker tell SSA the number changed?
Benefits are set from the earnings a person estimated. SSA’s guide tells anyone who thinks their earnings will differ from what they originally reported to let the agency know right away, so withholding matches the real figure. That can be done online through a my Social Security account at ssa.gov/myaccount or by phone at 1-800-772-1213, from 8 a.m. to 7 p.m. Monday through Friday.
A raise, an extra seasonal job or a client who pays late can each move income across the line. Writing down year-to-date wages against the $25,560 or $67,920 limit is the simplest way to see a withholding coming before the checks stop.
Working while collecting Social Security before 67?
Earnings over $25,560 can mean benefits held back for the months the bills still arrive, and a household that has not counted its year-to-date wages finds out late. Money withheld comes back only later, through a recalculated check at full retirement age.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
