The year a worker reaches full retirement age comes with the higher of Social Security’s two earnings limits. For 2027 it is $67,920, and the agency’s COLA page says the limit applies to people reaching full retirement age in 2027. Pay up to that amount, earned in the months before the month of the birthday, costs a worker nothing in benefits.

Why the limit jumps in the full-retirement-age year

Workers who collect benefits before full retirement age face a lower annual limit, $25,560 in 2027, with $1 withheld for each $2 above it. In the year a worker reaches full retirement age the rules change. Social Security’s page says it will deduct $1 from benefits for each $3 earned over $67,920 until the month before the worker turns full retirement age.

That is a $2,760 increase from 2026, when Social Security’s retirement planner put the limit at $65,160. It is also a gentler penalty: one dollar out of every three dollars over the line, against one out of every two for the younger group.

Only the months before the birthday month count

The $67,920 is not a limit on the whole calendar year. The planner page says only earnings through the month before the birthday month are counted, and that starting with the month a worker reaches full retirement age, earnings no longer reduce benefits. A worker whose full retirement age arrives in September 2027 has the first eight months of the year to stay under the limit. The pay from September onward is outside the test.

The question for a worker in this position is whether continuing to work through the year will cost any checks. For many, the answer is no. A worker paid $60,000 across the months before the birthday month is $7,920 under the limit, and a worker paid $80,000 in those months is $12,080 over it, with about $4,027 withheld at $1 for every $3.

The number that matters in the full-retirement-age year is how much of the pay lands before the birthday month. The Social Security Claiming & Family Benefits Kit includes a claiming calculator (Excel) for claiming age, break-even and survivor benefits, which lets a worker set the claiming month against the year’s pay.

Line up the claiming month with 2027 pay using the Claiming Kit’s calculator →

Which income goes into the total

Social Security counts wages from a job and net profit for the self-employed, including bonuses, commissions and vacation pay. It does not count pensions, annuities, investment income, interest, veterans benefits or other government or military retirement benefits. A worker with a large pension and a part-time job is therefore testing only the part-time pay against $67,920.

Pay that falls on the wrong side of the birthday month has no effect, which is why the timing of a bonus or a final paycheck deserves a look. The $67,920 limit and the $1-for-$3 deduction both stop at the month before the worker turns full retirement age, according to the COLA page.

The money withheld above the limit is not simply lost. Social Security says that at full retirement age it will recalculate the benefit amount to credit the months when benefits were reduced or withheld because of excess earnings. Once a worker is at full retirement age for the entire year, a separate rule applies: there is no limit on earnings.

Timing 2027 earnings around the birthday month

Social Security’s page on working while collecting benefits is the free reference, and it links to the publication How Work Affects Your Benefits and an earnings test calculator. Anyone reaching full retirement age in 2027 should look up the exact birthday month there and count backward to the first month of the year.

Gather the year-to-date pay stub, the expected pay for each remaining month before the birthday month, any bonus or commission schedule, and the monthly benefit amount from a my Social Security account. Add up pay through the month before the birthday month and compare the total with $67,920.

If the total is near the line, the useful question is which month the pay is earned in. A year-end bonus that lands after the birthday month falls outside the test. One that lands before it adds to the total.

Pay earned before the birthday month decides the $67,920 test

A worker who guesses wrong about which months count can see benefits withheld at $1 for every $3 over the line, or leave a claim date unexamined when the limit would never have been touched. The Social Security Claiming & Family Benefits Kit has a claiming calculator (Excel) for claiming age, break-even and survivor benefits, built to turn a pay schedule and a claiming month into numbers.

Check a full-retirement-age claim against the year’s pay in the Claiming Kit →

This article was produced with AI assistance and edited for accuracy against the sources linked above.