Many retirees in the United States keep working after claiming their Social Security benefits. For them, the Social Security Administration (SSA) has published the new limits of the retirement earnings test for 2027, which rise along with the 3.6% COLA.
The earnings test only affects beneficiaries who have not yet reached full retirement age. Once a person reaches that age, they can earn any amount without losing a single dollar.
New earnings limits for 2027
- Under full retirement age | from $24,480 to $25,560 a year ($2,130 a month).
- Year in which full retirement age is reached | from $65,160 to $67,920 a year ($5,660 a month).
- From the month of full retirement age | no limit.
How much Social Security withholds
If the retiree is under full retirement age for the whole year, the SSA withholds $1 for every $2 earned above $25,560. In the year the person reaches full retirement age, the agency withholds $1 for every $3 above $67,920, counting only the earnings before the month of their birthday.
For example, a 63-year-old retiree who earns $31,560 in 2027 would exceed the limit by $6,000. Social Security would withhold $3,000 of benefits that year, usually by holding back full monthly checks at the beginning of the year until that amount is covered.
The money is not lost
One of the most common doubts is whether those withheld benefits are lost forever. They are not. When the beneficiary reaches full retirement age, the SSA recalculates the monthly benefit to credit the months in which payments were withheld, so the check becomes higher from then on.
The full retirement age is 67 for people born in 1960 or later. In 2026 the limit was $24,480, as we explained in our article on working while on Social Security. Those who claim early also face a permanent reduction, as we detailed when analyzing retiring at 62.
Retirees who work should report their expected earnings to the SSA so the agency can adjust payments and avoid overpayments. The new limits take effect on January 1, 2027, the same month in which the 3.6% COLA reaches retirement checks.
