If you collect Social Security before your full retirement age (FRA) and pick up summer work, the Social Security Administration can temporarily withhold part of your benefit — $1 for every $2 you earn above $22,320 in 2026. That’s not a penalty; it’s a rule called the Retirement Earnings Test, and understanding it can save you from a nasty surprise when your direct deposit shrinks in the fall. The good news: once you hit your FRA, the earnings limit disappears completely, and Social Security quietly adds back the withheld months to your future checks.

What Is the Retirement Earnings Test and Who Does It Apply To?

The Retirement Earnings Test (RET) only affects people who are collecting Social Security retirement benefits before they reach their full retirement age. Your FRA is 67 if you were born in 1960 or later, or 66 and a few months if you were born between 1955 and 1959.

Here’s how the math works in 2026:

  • If you are under FRA for the entire year: Social Security withholds $1 in benefits for every $2 you earn above $22,320.
  • In the calendar year you reach FRA: A more generous limit applies — $1 withheld for every $3 earned above $59,520 (counting only earnings before the month you hit FRA).
  • After you reach FRA: No limit. Earn as much as you want with zero impact on your benefit.

So if you’re 64 years old, collecting Social Security, and you pick up a summer landscaping job or retail gig that pays $30,000 this year, you’ve exceeded the limit by $7,680 — and Social Security will withhold roughly $3,840 from your checks, usually spread across the following year.

Does Withheld Money Come Back to You?

Yes — and this is the part most people miss. When you reach your full retirement age, Social Security recalculates your benefit and permanently increases it to credit you for every month it withheld a full payment. The withheld money isn’t gone; it’s deferred. Over a long retirement, many people come out roughly even. But if your health is uncertain or you need income now, claiming early and working a high-earning job is a double-edged sword worth thinking through carefully.

When Should You Claim Social Security to Maximise Your Benefit?

The break-even point for delaying Social Security is typically around age 80. Every year you delay claiming past age 62 — up to age 70 — adds roughly 6–8% to your monthly benefit permanently. If you plan to keep working and earning above the RET limit before your FRA, delaying your claim often makes more financial sense than collecting a reduced benefit that gets withheld anyway.

A quick rule of thumb:

  • Claim early (62–64) if you have health concerns, need income, or have a spouse with a much larger benefit.
  • Claim at FRA (66–67) for a clean middle ground with no earnings restrictions.
  • Delay to 70 if you’re healthy, still earning, and want the highest possible monthly income in your 70s and 80s.

How Much of Your Social Security Benefit Is Taxable?

Even after you clear the RET hurdle, taxes can take another bite. The IRS taxes Social Security based on your “combined income” — that’s your adjusted gross income, plus any tax-exempt interest, plus half your Social Security benefit.

  • Combined income under $25,000 (single) or $32,000 (married filing jointly): 0% of your Social Security is taxable.
  • $25,000–$34,000 (single) or $32,000–$44,000 (joint): Up to 50% of your benefit may be taxable.
  • Above $34,000 (single) or $44,000 (joint): Up to 85% of your benefit may be taxable.

A summer job that bumps your income into a higher combined-income tier could push more of your Social Security into taxable territory — another reason to model the full picture before you accept that seasonal offer.

How Could a Summer Job Trigger Medicare IRMAA Surcharges?

IRMAA stands for Income-Related Monthly Adjustment Amount — essentially a Medicare surcharge for higher earners. Medicare uses your tax return from two years ago to set your Part B and Part D premiums. The standard Medicare Part B premium in 2025 was $185 per month, but IRMAA surcharges can push that to $628.90 per month for the highest earners.

In 2026, if your 2024 income was above $106,000 (single) or $212,000 (joint), you’re already paying IRMAA. A high-earning summer in 2026 could affect your 2028 premiums. If your income spikes due to a one-time event — like a seasonal job combined with a Roth conversion — you can appeal your IRMAA using Form SSA-44 and report the life-change. Keep receipts and documentation.

What Are the RMD Rules That Interact With Summer Earnings?

If you’re 73 or older in 2026, you’re required to take minimum distributions (RMDs) from your traditional IRA or 401(k). The SECURE 2.0 Act raised the RMD starting age to 73 (and eventually 75 for those born in 1960 or later). RMDs count as ordinary income — so stacking a summer paycheck on top of an RMD in the same year could push you into a higher tax bracket, increase the taxable portion of your Social Security, and even trigger IRMAA.

A practical move: talk to your tax advisor before July about whether a Qualified Charitable Distribution (QCD) — donating up to $108,000 of your RMD directly to a charity — could reduce your taxable income and soften the combined-income crunch.

Smart Steps Before You Take That Summer Job

  1. Check your FRA. If you’re already past it, earn freely — no RET applies.
  2. Estimate your annual earnings. Use Social Security’s Retirement Earnings Test calculator at ssa.gov.
  3. Model the tax impact. Add your projected wages to your expected Social Security, RMDs, and investment income.
  4. Watch the IRMAA thresholds. Staying just under the $106,000 single-filer line could save you thousands in Medicare premiums two years from now.
  5. Consider the timing of Roth conversions. If a summer job already lifts your income, this may not be the year for a large conversion.

A seasonal paycheck feels great in July. A smaller Social Security deposit in November feels a lot less great. A little planning now keeps both the job and the check working in your favour.

FAQ

Frequently Asked Questions

When should I claim Social Security to maximise my benefit?

Delaying Social Security past age 62 increases your monthly benefit by roughly 6–8% for each year you wait, up to age 70. If you are still working and earning above the Retirement Earnings Test limit, delaying your claim until your full retirement age (67 for most people born after 1960) or even age 70 typically produces a higher lifetime benefit, especially if you are in good health.

How much of my Social Security benefit is taxable?

Up to 85% of your Social Security benefit can be taxable depending on your “combined income” — your adjusted gross income plus tax-exempt interest plus half your Social Security. Single filers with combined income above $34,000 and joint filers above $44,000 face the 85% maximum. Lower income levels have 0% or 50% inclusion rates.

What are the RMD rules for 2025 and 2026?

The SECURE 2.0 Act raised the required minimum distribution (RMD) starting age to 73 for people born between 1951 and 1959, and to 75 for those born in 1960 or later. RMDs must be taken annually from traditional IRAs and most employer retirement plans and are taxed as ordinary income. Missing an RMD triggers a 25% excise tax on the amount not withdrawn.

How do I avoid Medicare IRMAA surcharges?

IRMAA surcharges are triggered when your income from two years prior exceeds $106,000 (single) or $212,000 (married filing jointly) in 2026. You can reduce income through strategies like Qualified Charitable Distributions from your IRA, timing Roth conversions carefully, or harvesting capital losses. If your income dropped due to a life-changing event, you can appeal your IRMAA using Form SSA-44 with the Social Security Administration.

What is the Medicare Part B premium for 2025?

The standard Medicare Part B premium for 2025 is $185.00 per month for most enrollees. Higher-income beneficiaries pay more through IRMAA surcharges, with premiums ranging up to $628.90 per month at the top income tier. Premiums are typically deducted directly from your Social Security benefit payment each month.