As Americans move past January and into February 2026, millions of retired people are adjusting to a changing financial environment in which “unretiring” has become a common way to manage rising living costs.
Yet anyone planning to work while receiving Social Security benefits this year must understand several important new limits and potential benefit reductions that could affect their overall income.
The Social Security Administration (SSA) and AARP are warning Americans about key 2026 updates that working Social Security recipients should review before their next paycheck arrives.
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For people who have not yet reached Full Retirement Age (FRA), the rules in 2026 are more restrictive than in previous years.
“You can get Social Security retirement or survivors benefits and work at the same time,” explained the SSA. “However, there is a limit to how much you can earn and still receive full benefits.”
“If you are younger than full retirement age and earn more than the yearly earnings limit, we may reduce your benefit amount.”
Working retirees should be aware of their Social Security yearly earnings limit.
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SSA explains Social Security deductions for working retirees
There is a specific formula the SSA uses to determine the amount of reduction in pay retired workers will see.
“If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit,” wrote the SSA. “For 2026, that limit is $24,480.”
“In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit,” the SSA continued. “In 2026, this limit on your earnings is $65,160. We only count your earnings up to the month before you reach your full retirement age, not your earnings for the entire year.”
Beginning with the month a person reaches Full Retirement Age, earnings no longer reduce Social Security benefits, regardless of how much income is earned.
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The SSA explains it will then recalculate the individual’s benefit amount to account for any months in which payments were reduced or withheld because of excess earnings.
Understanding these 2026 benchmarks is essential for retirees who want their return to the workforce to strengthen their finances rather than create an unexpected setback.
“Money is a major reason retirees resume employment,” wrote the AARP. “Nearly half of older workers surveyed by T. Rowe Price said financial concerns kept them in the labor force.”
“But it’s far from the only reason. Almost as many (45%) choose to work for the social and emotional benefits.”
Retired worker reductions, limits changes from 2025 to 2026
I reviewed the data reported by both the AARP and the Social Security Administration and performed a couple calculations to offer my readers a clear look at how reductions and limits for retired people who continue to work have changed for 2026 compared to 2025.
Retired workers under Full Retirement Age for entire year
- 2026 limit: You can earn up to $24,480 per year.
- 2025 limit: This is an increase of $1,080 from the 2025 limit of $23,400.
- Reduction: The SSA will deduct $1 from your benefits for every $2 you earn above this threshold.
Retired workers reaching Full Retirement Age in 2026
- 2026 limit: In the months leading up to your birthday, the limit is $65,160.
- 2025 limit: This is a $3,000 increase from the 2025 limit of $62,160.
- Reduction: The SSA will deduct $1 for every $3 you earn above the limit until the month you reach FRA.
Retired workers at or above Full Retirement Age
- There is no limit on how much you can earn starting the month you reach your FRA.
- Your benefits will no longer be reduced, regardless of your income level.
AARP discusses types of work retired people want
Going back to work doesn’t require returning to a former profession, employer, or full-time schedule.
Very few retirees choose to resume their previous careers, notes Judith Ward, a certified financial planner and thought‑leadership director at T. Rowe Price. Instead, many decide to explore new fields or take on entirely different roles.
“Don’t want to work full-time?” personal finance reporter Kerri Anne Renzulli wrote for AARP. “Consider picking up part-time work that would allow you to customize your workload and maintain time for other activities or goals that are important to your retirement lifestyle.”
“Whatever your preference, carve out time to cast a wide net and explore a variety of opportunities, from jobs for former employers or clients to consulting work, substitute teaching, or gig-economy jobs with a ride-share or food delivery service such as Uber, DoorDash or Postmates,” she continued.
“Also, think about the level of responsibility you want to take on and whether you want a structured or flexible work schedule, an in-person or remote job.”