Some working Americans collecting Social Security could temporarily lose nearly $1,000 in benefits if their earnings exceed a new federal limit in 2027. The Social Security Administration has set the 2027 retirement earnings test limit at $25,560, up from $24,480 in 2026, for beneficiaries who will remain below full retirement age throughout the year. For every $2 they earn above the limit, the agency withholds $1 in Social Security benefits.
The higher threshold means beneficiaries can actually earn more before Social Security starts withholding benefits. However, someone earning just enough above the new limit could still see hundreds or thousands of dollars withheld over the course of the year. Millions of older Americans continue working after they begin claiming retirement benefits.
Social Security's earnings rules are therefore especially important for people balancing wages with their monthly benefit checks. The earnings test can be particularly confusing because exceeding the annual threshold doesn't simply trigger a tax. Instead, the Social Security Administration can withhold part or, depending on earnings, potentially all of a worker's Social Security benefits until the required amount has been withheld.
The 2027 threshold is higher than this year's limit, meaning beneficiaries can earn an additional $1,080 before the general earnings test begins to apply. But with it comes another Social Security change. The maximum amount of earnings subject to Social Security payroll taxes will increase from $184,500 in 2026 to $192,300 in 2027.
Employees pay a 6.2 percent Social Security tax on wages up to that amount, while employers contribute another 6.2 percent. There are two earnings-test thresholds, depending upon whether the beneficiary will reach full retirement age during the year. For beneficiaries who remain under full retirement age throughout 2027, the annual exempt amount will be $25,560, equivalent to $2,130 per month.
Social Security withholds $1 in benefits for every $2 earned above that annual amount. But for people who reach full retirement age during 2027, a considerably higher threshold of $67,920 applies to earnings received before the month they reach full retirement age. Social Security withholds $1 for every $3 earned over that limit.
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