The year you reach full retirement age has its own earnings test

You turn 67 in 2027, you are already collecting Social Security, and you are still working. The earnings limit you have heard about is not the one that applies to you this year.

Why does the year you reach full retirement age get its own test?

Social Security has two earnings tests. The first applies only in a year you are under full retirement age for the entire year: SSA holds back $1 of benefits for each $2 of earnings over $25,560 in 2027 (covered in The earnings test, explained and If I keep working, will Social Security take my check?).³ That test does not apply in the year you reach full retirement age.

In the calendar year you reach full retirement age, three things are different.¹ The limit is much higher: $67,920 in 2027, up from $65,160 in 2026.³ The rate is gentler: $1 withheld for every $3 over, not every $2.¹³ And SSA counts only what you earn in the months ahead of your full retirement age month; from that month on, earnings are ignored entirely.¹³

Figures: SSA’s 2027 fact sheet.³

Which month is your full retirement age month?

Anyone born in 1960 or later has a full retirement age of 67.⁴ For the 1959 cohort it is 66 and 10 months, so the full retirement age month comes ten months after the month of the 66th birthday.⁴ People born on the first of a month are treated as if they were born in the previous month, so someone born January 1, 1960 belongs to the 1959 group.⁴ The test counts earnings before your full retirement age month, not before your birthday, so check the chart rather than assume.

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What does the arithmetic look like for someone turning 67 in 2027?

2027 example. Take someone born July 15, 1960. She reaches 67, her full retirement age, in July 2027 (had she been born July 1, SSA would treat her as reaching 67 in June).⁴ She started her benefit early and works through June at $8,000 a month, then stops.

• Earnings that count: January through June, six months at $8,000, or $48,000.
• Limit for the months before July: $67,920.³
• $48,000 is below the limit. Nothing is withheld. Her checks are not touched.

The $25,560 limit for people under full retirement age all year would have caught her; the FRA-year limit does not.

Now raise her pay. At $12,000 a month, January through June is $72,000. That is $4,080 over $67,920. One dollar for every three: $1,360 is withheld for the year. From July, when she reaches full retirement age, she can earn any amount with no reduction.¹

What is the monthly test in your first year of retirement?

SSA also has a monthly test, and it applies in one year only, usually the first year you retire.² In that year SSA pays a full check for every whole month in which it treats you as retired, whatever your yearly total. In the months before your full retirement age month, a month counts as retired when your earnings are $5,660 or less in 2027 ($5,430 in 2026) and, if you are self-employed, you do not perform substantial services in your business, which SSA generally defines as more than 45 hours a month, or 15 to 45 hours in a highly skilled occupation.²³ This is the rule that rescues someone who earned a large salary through spring, retired, and claimed in the summer.

How does Social Security give the withheld months back?

The withheld money is not a penalty, and it is not gone. SSA’s planner says that once you reach full retirement age it refigures your benefit to credit every month in which a check was reduced or held because of earnings.¹ In plain words, those months are treated as months you had not yet claimed, so the reduction for claiming early shrinks. The result is a larger monthly check for life, not a refund. The longer you live, the more of the withheld money comes back.

Only earned income counts toward the test: wages (including bonuses, commissions and vacation pay) and net self-employment profit. Pensions, annuities, investment income, interest, veterans benefits and other government or military retirement pay do not.¹ And if your 2027 earnings rank among the years SSA uses to figure your benefit, SSA recalculates it, with the increase effective January 2028.¹ For the separate monthly rules on SSDI and SSI, see How much you can earn in 2026 without touching your benefits.

What to do

1. Find your full retirement age month on SSA’s retirement age chart; if you were born in 1959, it is ten months after the month of your 66th birthday.⁴
2. Add up the earnings you expect in the months before that month, and compare the total with $67,920 for 2027.³
3. If you will be over, call SSA at 1-800-772-1213 with your estimate so withholding is set correctly and you avoid an overpayment notice later.⁵
4. If 2027 is the year you retire and you stop work mid-year, ask SSA to apply the special monthly rule for the months before your full retirement age month in which you earn $5,660 or less and, if self-employed, do not perform substantial services.²³
5. After you reach full retirement age, check your benefit amount in your my Social Security account at ssa.gov/myaccount; the recalculation is automatic, but confirm it happened.¹