Retirement Social Security

A Little-Known Social Security Timing Trick Could Save You Thousands in Withheld Benefits

Knowing how Social Security's earnings test works could help you minimize the financial impact.

By Maurie Backman , Edited by Laura Hohenstein

Updated May 26, 2026

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At some point, you may decide to claim Social Security and use those benefits to retire early. But you may also decide to continue working in some capacity to stay busy and generate income.

You're allowed to work while collecting Social Security benefits. And once you reach full retirement age (FRA), you can earn any dollar amount without the risk of losing some (or all) of your Social Security check. Prior to FRA, though, you'll be subject to an earnings test. And exceeding its limits could result in having benefits withheld.

One lesser-known timing trick, though, could make it so you're able to earn a nice income without losing out on Social Security.

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How Social Security's earnings test works

Social Security's earnings test applies to people who claim benefits prior to reaching FRA, which is 67 for those born in 1960 or later. The limits of that test change every year. But if you work while receiving benefits and earn too much, you could have some or even all of your Social Security check withheld.

This year, the earnings test limit is $24,480 if you won't be reaching FRA by December 31. If you earn more than $24,480, you'll have $1 in Social Security benefits withheld per $2 of earnings.

If you'll be reaching FRA by December 31 this year, the earnings test limit is $65,160. Above that limit, $1 in Social Security will be withheld per $3 of earnings.

Withheld benefits due to exceeding the earnings test limit are not forfeited for good. Once you reach FRA, your monthly benefits will be recalculated to account for the money that was withheld. However, in the near term, exceeding the earnings test limit could create a cash flow problem for people who aren't prepared.

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The timing of your earnings has a huge impact

Having Social Security withheld, even temporarily, could have a negative impact on your finances. But there may be a way to avoid that.

Imagine you'll reach FRA in September this year, but you've been working since January as a freelance consultant. Let's also say you expect to earn $80,000 by the end of the year.

If you split that work evenly and earn $6,667 a month every month, it means you'll have earned $53,336 before reaching FRA. You won't be above the $65,160 threshold for having benefits withheld, and so your wages should not have a negative impact on your Social Security checks.

But let's say you decide to front-load your work so you can take a good chunk of time off later in the year. If you earn $9,000 a month between January and August, and just another $8,000 between September and December, you'll have wages of $72,000 prior to reaching FRA. Of that, $6,840 will have exceeded the earnings test limit.

You'll have $1 in Social Security withheld per $3 of earnings above that point -- so in this case, $2,280 of benefits withheld from your monthly checks -- simply for earning that extra money earlier in the year rather than later. But had you kept your earnings at or under $65,160 through August, you could've avoided withheld benefits.

Shifting income could work to your advantage

In the above scenario, it's easy to see how a timing mistake could result in less Social Security in the near term. So if you have control over the timing of your income, you may want to specifically try to keep your wages below the earnings test limit until you reach FRA. Or, to put it another way, you may want to try to shift more of your wages until after you've reached FRA.

Now this won't always work. If you have a part-time job with preset hours, you may not be able to control the timing of your income. But if you work freelance, you may have more options. The thing to keep in mind is that only wages earned prior to the month you reach FRA count toward the earnings test limit.

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An early claim may not be your best bet

In the year you'll be reaching FRA, you get a fair amount of leeway to earn money without risking having any of your Social Security benefits withheld. But in earlier years, the earnings test limit is much lower.

If you know for a fact that you plan to continue working and expect to earn a decent wage, you may want to hold off on claiming Social Security benefits early. Though you're allowed to sign up as early as age 62, it makes less sense to claim benefits early when you expect to have a good chunk of them withheld due to exceeding the earnings test limit.

Remember, claiming Social Security ahead of FRA results in reduced benefits for life. Unlike the earnings test rule, your benefits aren't recalculated at FRA if you file early. There's little sense in slashing your monthly checks only to have most of that money withheld because you're still working.

Bottom Line

In the course of making your retirement plans, it's important to figure out the right time to claim Social Security benefits. But part of that choice means understanding the rules for working while collecting benefits and figuring out if you intend to continue holding down a job.

Waiting until FRA or beyond to claim benefits means you don't have to worry about an earnings test at all. It could be worth holding off on benefits for that reason alone.

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