Social Security publishes its own worked example of what working does to an early retirement check, and the numbers are blunt. A person under full retirement age who earns $33,400 in 2026 has $4,460 withheld from benefits and keeps $5,140 of a $9,600 yearly benefit. The example appears on the agency’s Receiving Benefits While Working page.

How the $4,460 is figured

The agency’s example starts with a worker entitled to $800 a month, which is $9,600 a year. For 2026, Social Security sets the earnings limit at $24,480 for anyone who is under full retirement age for the whole year. This worker earns $33,400, which is $8,920 more than the limit.

The rule is $1 withheld for every $2 earned over the limit, the agency’s earnings test page says. Half of $8,920 is $4,460. Subtract that from $9,600 and the worker is left with $5,140 for the year. The $4,460 is withheld from the benefit, not paid out, and the pages say it is not simply lost, as covered below.

The same rule works for any other income. A worker who earns $30,000 is $5,520 over the limit, so $2,760 is withheld and $6,840 of the same $9,600 benefit is paid. A worker who earns $24,480 or less has nothing withheld. Those two figures are arithmetic from the agency’s rule, not examples the agency prints.

Who the limit applies to

The earnings test only reaches people who collect benefits before full retirement age. For people born in 1960 or later, full retirement age is 67. Someone who starts at 62 and keeps working can face the test in every year until then.

For anyone deciding whether to claim at 62 while still working, the question is how much of the first years’ checks will be withheld and what that does to the decision. The answer depends on the benefit amount and on the expected earnings, which is why the example uses a specific benefit and a specific wage.

A worker who claims at 62 and earns $8,920 over the 2026 limit watches $4,460 of the check get held back. The Social Security Claiming & Family Benefits Kit puts the 2026 earnings-test rules next to a claiming calculator (Excel) for claiming age, break-even and survivor benefits.

See the 2026 earnings-test rules in the Social Security Claiming Kit →

Withheld benefits come back

Withholding is not a permanent cut. Under the section on reaching full retirement age, the Receiving Benefits While Working page says Social Security “will recalculate” the benefit to credit the months in which benefits were reduced or withheld because of earnings. The earnings test page adds that the monthly benefit is then increased permanently.

That recalculation changes the math of the example. The $4,460 is held back this year, and the agency says it raises the check from full retirement age on. How much the check rises, and how long it takes to make up the difference, depends on the person’s own record. Social Security does not give a figure for the example.

The year full retirement age arrives

A higher limit applies in the calendar year a person reaches full retirement age. For 2026 it is $65,160, and the rate eases to $1 withheld for every $3 earned over it. Only earnings from the months before the birthday month count. Starting the month full retirement age is reached, earnings no longer reduce benefits at all.

This is why the same worker can see very different results in two neighboring years. At 64, the $24,480 limit and the $1-for-$2 rule apply. In the year of the 67th birthday, the limit is more than two and a half times as large.

Running the numbers before claiming

The agency’s page is the free starting point. It gives the 2026 limit, the withholding rule and the full retirement age recalculation, and the earnings test page lists the lower and higher exempt amounts for 2026.

A short worksheet answers most of the question. Write down the monthly benefit at the age being considered, the earnings expected for the year, and the amount over $24,480. Divide the excess in half, then subtract that from a year of benefits. Do it again for a part-time wage. Then compare the result with simply waiting, using the reductions on the age reduction page: for anyone born in 1960 or later, starting at 62 pays about 30 percent less than starting at 67.

Social Security’s own wording is the last word on the figures. The $24,480 and $65,160 limits are 2026 amounts, and the agency updates them each year, so the numbers for 2027 will differ.

Earning $8,920 over the limit costs $4,460

Claiming at 62 and picking up a job that pays more than $24,480 can hold back half of every dollar over it, with the catch-up not showing until full retirement age. The Social Security Claiming & Family Benefits Kit lays out the 2026 earnings-test rules and a claiming calculator (Excel) for claiming age, break-even and survivor benefits. Part 4 of the 37-page kit is devoted to the earnings test.

Test a claim at 62 against a paycheck with the Claiming Kit’s calculator →

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