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We often speak with clients who are approaching retirement but aren’t quite ready to stop working entirely. Many wonder whether they can claim Social Security benefits early while continuing to earn income. The short answer is yes — but there are important rules that can affect how much you receive, at least temporarily.

The Social Security earnings test still applies if you claim benefits before reaching your full retirement age (FRA). For most people born in 1960 or later, FRA is 67. Claiming before then triggers two potential impacts: a permanent reduction in your monthly benefit for claiming early, and possible temporary withholding of benefits if your earnings exceed certain limits.

In 2026, the numbers look like this:

• If you will be under full retirement age for the entire year, the annual earnings limit is $24,480. For every $2 you earn above that amount, the Social Security Administration (SSA) withholds $1 in benefits.
• In the year you reach full retirement age, the limit rises significantly to $65,160 for the months before you hit FRA. Once you reach FRA, the earnings test disappears entirely — you can earn any amount without any reduction in your monthly benefit.

These limits are adjusted annually for inflation, and the withheld benefits are not lost forever. Once you reach full retirement age, the SSA recalculates your benefit and adds back the value of the withheld months, which permanently increases your future payments.

Let’s look at a simple example. Suppose your monthly benefit is $600 ($7,200 annually) and you earn $26,080 in 2026 — $1,600 over the $24,480 limit. The SSA would withhold $800. You might receive no payment for January and February, then resume full payments in March. Any over-withholding is typically refunded the following year when the SSA finalizes your earnings.

There’s also a helpful “first-year rule” for those who start benefits mid-year. If you retire partway through the year, only earnings from the month you begin receiving benefits count toward the limit. This can be a useful planning tool if you’ve already earned a high income earlier in the year.

It’s also worth remembering the permanent reduction for claiming early. For those born in 1960 or later, claiming at age 62 reduces your benefit by about 30%. A $1,000 full retirement age benefit would drop to roughly $700 per month. For spouses, the reduction can be even steeper.

At Infinium, we often caution clients that claiming early while still working can be costly over a long retirement. The combination of the permanent haircut plus temporary withholding means you could be leaving meaningful lifetime income on the table — especially if you live into your 80s or 90s.

That said, every situation is unique. Some clients need the income now, others want flexibility, and some simply enjoy working. The key is running the numbers carefully. Tools on SSA.gov can help estimate your benefits, but we always recommend reviewing your specific scenario with your financial advisor and the Social Security Administration.

Practical steps we suggest:

• Estimate your 2026 earnings as accurately as possible when applying.
• Consider delaying benefits if you can afford to, allowing them to grow by 8% per year (delayed retirement credits) up to age 70.
• Use the first-year rule strategically if you plan to retire mid-year.
• Stay in touch with the SSA — report earnings changes promptly to avoid surprises.

Social Security remains a critical piece of most retirement plans, but the rules around working and claiming can feel complex. At Infinium, we help clients model different claiming strategies alongside their overall portfolio, pension, savings, and tax picture to make confident decisions.

If you’re approaching retirement and wondering how continued work might affect your benefits, we’d be happy to sit down and walk through the numbers together. Understanding these rules today can help protect your income for decades to come.