Most people who move into retirement do it in stages. They may claim Social Security, keep working part‑time, or go back to work later. The 2026 rules change how this mix of work and benefits looks, especially because of the new COLA increase and higher earnings limit numbers. Here is a clear, step‑by‑step way to plan what to do, what to expect from Social Security, and when to act.
Step 1: Get a Clear Picture of Your Status Before 2026
Before you look at the new rules, take time to fix three key facts about yourself:
- Your full retirement age (FRA)
FRA is the age when you can claim your full Social Security retirement benefit with no work penalties. The exact age depends on your year of birth. Your FRA does not change in 2026, but the way work affects your benefit before FRA does depend on the new earnings limit. -
Whether you’ll be under FRA, reaching FRA, or past FRA in 2026
- Under FRA all of 2026
- Reaching FRA sometime in 2026
- Already at or past FRA by January 2026
Which group you’re in completely changes how the earnings limit applies to you.
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Whether you’ll be claiming benefits, already on benefits, or still waiting
- Already receiving Social Security checks before 2026
- Planning to start your benefit in 2026
- Planning to delay beyond 2026
Everything else in this process flows from these three points. If you don’t know them yet, create a my Social Security account on the Social Security Administration website to see your record, your projected benefit, and your FRA: https://www.ssa.gov.
Step 2: Estimate Your 2026 Social Security Benefit With the New COLA
Next, estimate what your actual 2026 monthly benefit might be. In 2026, Social Security payments get a 2.8% cost‑of‑living adjustment (COLA).
This COLA applies to:
– Retirement benefits
– Survivor benefits
– Family benefits
– Social Security Disability Insurance (SSDI)
– Supplemental Security Income (SSI)
For many retirees, this means about $56 more per month on average starting with the January 2026 payment. For people who qualify for the maximum benefit at full retirement age, the maximum monthly benefit in 2026 rises to $4,152.
A simple way to estimate your 2026 amount:
– Take your current monthly benefit.
– Multiply by 1.028.
Example: if you receive $2,000 per month in late 2025:
$2,000 × 1.028 = $2,056 — that’s your rough 2026 monthly benefit.
If you haven’t claimed yet, your first check in 2026 will already include this COLA, based on the benefit shown in your Social Security statement adjusted for 2026.
This step is important because you’ll later compare this monthly amount to what you can earn under the earnings limit without seeing benefits held back.
Step 3: Compare Your 2026 Work Plans to the New Earnings Limits
Once you know your likely 2026 benefit, turn to your work plans. The 2026 rules give you more room to earn before Social Security withholds any benefits, but the limits still matter.
2026 earnings limits:
| Situation | Annual earnings limit | Withholding rule |
|---|---|---|
| Under FRA for all of 2026 | $24,480 | $1 withheld for every $2 earned above the limit |
| Reach FRA sometime in 2026 | $65,160 | $1 withheld for every $3 earned above this amount until the month you reach FRA |
| At or past FRA for all of 2026 | No earnings limit | No reduction in Social Security benefits |
Earnings that count for this test:
– Gross wages from employment
– Net earnings from self‑employment
Most other income — pensions, IRA or 401(k) withdrawals, dividends, interest, and capital gains — does not count toward the earnings limit.
Action checklist:
1. Estimate your 2026 wages or self‑employment income.
2. Decide which earnings limit applies (under FRA all year, FRA in 2026, or past FRA).
3. Compare your expected earnings to the correct limit.
According to analysis by VisaVerge.com, this comparison step is where many working retirees either protect their benefits or accidentally trigger large withholdings simply by not checking the numbers in advance.
Step 4: See How Benefit Withholding Would Work if You Cross the Limit
If your expected earnings exceed the 2026 limit that applies to you, Social Security will withhold some of your benefits. This affects cash flow but does not permanently take away your Social Security.
How withholding works:
– Social Security calculates how much you earn above the annual limit.
– It applies the applicable rule: $1 held back for every $2 (under FRA all year) or $1 held back for every $3 (reach FRA in 2026 before your FRA month).
– The agency often halts full monthly checks until it has withheld the required annual amount, instead of trimming every check.
Example: if your monthly benefit is $2,000 and Social Security must withhold $6,000 for the year, it may stop sending checks for three months, then resume normal payments.
Special note for the year you reach FRA:
– There is a monthly earnings test in that year.
– If earnings in a month before your FRA month are below a set monthly figure, you can still receive a check for that month even if your annual earnings exceed the yearly limit.
– This can protect your cash flow if you retire mid‑year, after a high‑earning start.
Later, when you are past FRA, Social Security will recalculate your benefit to credit you for months when benefits were withheld because of work. That recalculation can increase your monthly amount going forward (the article does not provide exact adjustment figures).
Important: Withheld benefits are a timing/administrative matter, not a permanent forfeiture. But they can significantly change year‑to‑year cash flow.
Step 5: Factor In the Higher Wage‑Tax Cap if You’re Still Working
If you’re working while claiming Social Security, the maximum taxable earnings cap for Social Security payroll taxes rises in 2026.
- 2026 maximum taxable earnings cap: $184,500 (up from $176,100 in 2025)
- OASDI tax rate: 6.2% for employees and 6.2% for employers
Implications:
– Wages and self‑employment earnings up to $184,500 in 2026 are subject to Social Security payroll (OASDI) taxes.
– If you’re a working retiree, payroll taxes may increase because more of your income falls under the higher cap.
– This change does not directly change the Social Security benefit amount you are already receiving — it affects current contributions to the system.
Step 6: Check Your Work Credits if You Work Part‑Time or Off and On
If you work part‑time or seasonally, work credits determine eligibility for benefits. The 2026 credit amount rises.
- 2026: $1,890 in earnings = one work credit
- Maximum 4 credits per year
- 2025: one credit required $1,810
Why it matters:
– Work credits determine whether you qualify for retirement benefits, SSDI, or some survivor benefits.
– If you work only a few months each year, the higher $1,890 required per credit may mean you need to increase hours or earnings in 2026 to reach four credits.
Note for newer immigrants 🇺🇸:
– This change can affect how quickly they build the required total credits for future retirement benefits.
Step 7: Understand How Social Security Will Recalculate Your Benefits if You Keep Working
If you receive Social Security and continue to work, the agency may recalculate your benefits based on recent earnings.
Each year Social Security:
– Reviews earnings records for beneficiaries who also have wages or self‑employment income.
– Checks whether the latest year’s earnings are one of your highest‑earning years.
– If so, automatically recalculates your benefit and pays any increase — usually in December of the following year.
You do not need to file a special form for this — the system does it automatically. The recalculation can slightly raise your monthly benefit if recent work replaces lower‑earning years in your record.
Important limit:
– The earnings limit rules and withholding affect your worker benefit, but they do not create extra benefits later for certain family members.
– Spouses and survivors who receive benefits only because they care for minor children or children with disabilities do not get their benefits raised at full retirement age because of past work penalties on the worker’s record.
Step 8: Build a Practical Timeline for 2025–2026
Putting all the pieces together, follow this simple timeline to prepare.
Late 2025: Set your baseline
– Check your Social Security statements through your my Social Security account.
– Confirm your FRA and whether you will be under, reaching, or past FRA in 2026.
– List expected income sources for 2026 and separate wages/self‑employment from other income.
Before accepting 2026 work: Test the earnings limit
– Estimate your 2026 wages/self‑employment income.
– Compare that number with the correct 2026 earnings limit:
– $24,480 if under FRA all year
– $65,160 if reaching FRA in 2026
– Use Social Security’s online Earnings Test Calculator to estimate how many months of benefits might be withheld and whether working is worth it.
If you haven’t claimed yet: Decide on timing
– If you’re close to FRA and expect high earnings in 2026, consider waiting until FRA or later to claim to avoid the earnings test and to secure a higher monthly benefit.
– If you need income immediately, weigh that need against the potential for several months of withheld benefits.
During 2026: Keep records and watch your income
– Track wages and net self‑employment income month by month.
– If you reach FRA in 2026, monitor both the annual and monthly earnings tests so you don’t miss an eligible payment.
– If you work outside the United States while under FRA, inform Social Security — foreign work can affect your benefits.
Late 2026 and beyond: Review what happened
– Check benefit notices to confirm how much was withheld due to the earnings limit and that it matches your expectations.
– Remember Social Security reviews records yearly and may recalculate your benefit upward if recent work was among your best years.
– Watch for future COLA announcements and new earnings limits via your my Social Security account so you can plan each year ahead.
Key takeaway: By confirming your status, estimating your COLA‑adjusted benefit, comparing expected income to the 2026 earnings limits, and planning work accordingly, you can manage cash flow and still take advantage of opportunities to work in retirement.
For 2026, Social Security applies a 2.8% COLA to benefits, raises annual earnings limits ($24,480 under FRA, $65,160 in FRA year), increases the OASDI taxable cap to $184,500, and raises the work‑credit earnings to $1,890. Beneficiaries should confirm FRA status, estimate COLA‑adjusted benefits, and compare planned 2026 earnings to limits to avoid temporary withholdings. Withheld amounts are not lost—SSA recalculates benefits later. Use the my Social Security account and SSA calculators to plan.
