"There are two earnings tests, and which one applies depends on whether you reach FRA during the calendar year. For workers under FRA all year, Social Security withholds $1 in benefits for every $2 earned above $24,480 in 2026. That's the figure most bandied about. In the calendar year you actually hit FRA, the limit jumps to $65,160, and withholding drops to $1 for every $3 over. Even better, only wages earned in the months before your FRA month count toward that cap. From that month forward, earnings are unlimited and untested for the rest of your life."
"For our recipient, only January through September wages count against the threshold. The months of October, November, and December are off the books for earnings-test purposes. Run the numbers two ways. If she earns $60,000 January through September and another $20,000 October through December, her countable earnings sit below the cap. Nothing is withheld."
"If instead she front-loads bonuses and overtime so those same nine months bring in $80,000, she is $14,840 over the limit. At $1 withheld per $3 over, Social Security holds back roughly $4,947, recovered later as a slightly higher monthly ben"
A woman turning 67 in October 2026 has full retirement age in that month and plans to keep working part time. Social Security withholds benefits based on earnings limits, but the applicable test depends on whether full retirement age is reached during the calendar year. For people under full retirement age for the entire year, benefits are withheld $1 for every $2 earned above $24,480 in 2026. In the year full retirement age is reached, the limit rises to $65,160 and withholding becomes $1 for every $3 over. Only wages earned before the month of full retirement age count, while earnings from that month onward are unlimited and not tested. With earnings below the cap, no withholding occurs; with earnings above the cap, benefits are withheld and later recovered.
Read at 24/7 Wall St.
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