Finance

Are you still working while collecting Social Security checks? Pay close attention because this rule could vanish without you knowing

Moneywise · Jul 22, 2026 18:05 · 5 min read

This Social Security rule could vanish soon

You probably know some of your benefits can be withheld if you earn above certain thresholds, but Congress is looking to change that.

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Taking benefits while still punching in at work? You probably already know that there’s a limit on how much you can earn before your benefits start getting clawed back.

The retirement earnings test (RET) was introduced during the Great Depression to push more seniors to retire and “free up” jobs for younger Americans, according to the Economic Policy Innovation Center (1). Since then, millions of Americans who claimed benefits before their Full Retirement Age (FRA) and above certain income thresholds have had a portion of their benefits withheld.

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Now, Congress is debating whether to scrap the rule entirely.

The move could have an indirect impact on all beneficiaries, even if they don’t work. Here’s a closer look at what this could mean for your retirement.

Understanding the RET

The retirement earnings test (2) (RET) only applies to Social Security recipients who claim benefits before hitting their full retirement age (FRA). This is 67 for anyone born in 1960 or later.

Here is how the 2026 income limits break down:

Under FRA for the full year: Social Security withholds $1 for every $2 earned above $24,480.
Reaching FRA during the year: The threshold rises sharply: $1 is withheld for every $3 earned above $65,160, but only counting wages from months before your birthday month.
At or past FRA: The earnings test vanishes entirely. There is no income cap and no benefit reduction, regardless of how much you earn.

One critical detail: Withheld benefits are not permanently lost (3). Once you reach FRA, Social Security recalculates your monthly payment upward to credit back the months your checks were reduced.

Even so, for retirees counting on that income now, the short-term reduction can create real cash flow strain.

And that’s what lawmakers want to alleviate with their newly proposed Senior Citizens’ Freedom to Work Act.

What is the Senior Citizens’ Freedom to Work Act?

Republican lawmakers have recently raised the prospect of eliminating the RET. In April, House Representative Greg Murphy introduced the Senior Citizens’ Freedom to Work Act (4) to repeal the earnings test. Senator Rick Scott of Florida supported the movement with companion legislation.

“American seniors’ ability to earn income and enjoy the dignity of work should not be penalized by arbitrary parameters to receive Social Security benefits,” Congressman Murphy wrote in a press release.

If passed, this repeal could have far-reaching impacts.

Roughly 43% of Social Security beneficiaries have also earned income from work at some point, according to a 2025 study by the Center for Retirement Research at Boston College (5). Repealing the RET could potentially unlock a benefit boost to many of these workers.

On the other hand, critics argue that repealing RET would increase the agency’s payouts, adding further pressure on a trust fund already under immense strain.

“If this gets passed, it’s another hit to the system. And with the current direction of Social Security, I wouldn’t bet against this being one more step toward accelerating its long-term strain,” Kevin Thompson, CEO of 9i Capital Group, told (6)Newsweek (6). “At some point, lawmakers need to focus on funding Social Security, not continuing to chip away at it.”

If you’re anxious or unsure about the impact of this rule on your retirement, now is the perfect time to prepare.

Prepare yourself

The ongoing debate over the RET rule could highlight how complex the system is and how even small, mundane changes can have far-reaching impacts on your retirement. There’s no way to predict how the system will be reformed in the future, but you can take steps to prepare for any scenario.

Weaving a personal safety net to absorb any shocks or benefit changes could be the right approach for many pre-retirees. After all, if you retire solely on the market when it comes to retirement, what happens if it’s a down year? This is where safe haven assets can be used to bridge the gap.

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.

To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.

As for those who are working or plan to work while collecting benefits, hiring an expert financial advisor can help you create a budget and plan to minimize taxes or benefit withholding. This is especially true for high-income seniors with sizable nest eggs who are more exposed to complex taxes and penalties.

If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.

Simply answer a few questions about your savings, retirement timeline and overall investment portfolio.

From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.

You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.

WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed.