Here’s a bold truth: Navigating Social Security rules can feel like walking through a financial minefield, especially when it comes to the earnings test. But here’s where it gets controversial: Can you actually stop your Social Security payments if you exceed the earnings limit? Let’s break it down in a way that even beginners can understand.
Imagine this: You’ve decided to start collecting Social Security before reaching your full retirement age, but you’re still working and earning more than the annual limit—which, as of 2026, is $24,480. The earnings test kicks in, reducing your benefits by $1 for every $2 you earn above that threshold. And this is the part most people miss: While it feels like you’re losing money, those withheld amounts aren’t gone forever. Social Security will gradually add them back to your benefits over time. However, what you do lose is the potential increase in your monthly benefit that comes from delaying your application until full retirement age.
Now, here’s the silver lining: Once you reach full retirement age, you can suspend your Social Security payments entirely. At that point, the earnings test no longer applies. Even better, if you choose to suspend your benefits, you’ll earn delayed retirement credits, boosting your future checks by 8% for each year you wait between full retirement age and age 70. For most people, that 24% increase (plus cost-of-living adjustments) makes the wait well worth it.
But here’s the controversial question: Is it fair that the earnings test penalizes early claimants who continue working? Or does it strike the right balance between encouraging delayed retirement and supporting those who need benefits sooner? Let us know your thoughts in the comments.
For more insights, check out Liz Weston’s other columns, like What are share or deposit-secured loans, and who offers them? or Can I set up a 529 account for a grandchild who lives abroad? Liz, a Certified Financial Planner and personal finance columnist for NerdWallet, tackles these questions and more. Have a question for Liz? Send it to 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or use the ‘Contact’ form at asklizweston.com.
