Working after full retirement age: what changes and what does not
From the month you reach full retirement age, a paycheck no longer costs you any benefit. It can still add to it.
Checked by Radif Partners · Editorial policy · How we calculate
Once you reach full retirement age, 66 and 10 months for people born in 1959 and 67 for anyone born in 1960 or later, the earnings test stops: starting with that month, the SSA no longer withholds benefits whatever you earn, and it recalculates your benefit to credit any months withheld earlier. Your wages remain subject to Social Security and Medicare tax at any age, 6.2% and 1.45% for employees, and self-employment tax still applies to net profit. In return, every year of new earnings is checked against your record: the SSA reviews it automatically each year (20 CFR 404.285), and if the new year beats one of your 35 best, your PIA rises, with the increase paid from January of the following year. A worker born in 1959 with a steady $60,000 career who earns $90,000 in 2026 would see the PIA move from $2,274.90 to $2,316.70, about $41.80 a month more for life. Higher earnings can also make more of the benefit taxable.
What a 2026 paycheck adds to your PIA
PIA increase from 2026 earnings
$41.80 a month
| PIA without 2026 | $2,274.90 |
| PIA with 2026 | $2,316.70 |
| AIME without / with | $3,875 / $3,979 |
Worker born in 1959 (eligible 2021, COLAs 2021 to 2025 included). The raise is paid from January 2027.
The earnings test ends with the month of full retirement age
The SSA's page on receiving benefits while working is explicit about full retirement age: "Beginning with the month you reach that age, your earnings no longer reduce your benefits, no matter how much you earn." In the calendar year you reach it, only earnings before that month count against the higher limit of $65,160, at $1 withheld for every $3 above it. From the month itself, nothing is withheld. Any benefits withheld before full retirement age are not lost: the SSA recalculates the amount at that age to give you credit for the months it held back. The earnings limit page covers the rules before that point.
An example for the year itself. A worker born in June 1959 reaches 66 and 10 months in April 2026 and collects $2,274 a month. If they earn $70,000 from January to March, $4,840 is above the limit, so $1,613 is withheld from the benefits for those months. Whatever they earn from April onward changes nothing.
Taxes keep running
Reaching full retirement age, or receiving benefits, does not exempt a paycheck from payroll tax. IRS Publication 15 states that wages are subject to Social Security and Medicare taxes "regardless of the employee's age or whether they are receiving social security benefits." On $90,000 of wages in 2026 that is $5,580.00 of Social Security tax and $1,305.00 of Medicare tax for the employee, matched by the employer. For the self-employed the IRS says the self-employment tax rules "apply no matter how old you are"; the same $90,000 as net profit costs $12,716.60.
The other tax is the one on the benefit. Under IRS Publication 915, half of the benefit plus other income determines how much of the benefit is taxable. A married couple filing jointly with $27,288 of benefits and $90,000 of wages has a provisional income of $103,644, above the $44,000 threshold, so $23,195 of the benefit, 85%, is taxable. The benefit tax calculator runs other cases.
The yearly recomputation
Under 20 CFR 404.285, "each year, we examine the earnings record of every retired, disabled, and deceased worker" to see whether the PIA can be recomputed, and the SSA does it without a request. The rule that decides is the same as for the first computation: the 35 highest indexed years count. A new year enters only by pushing out a lower one.
Take a worker born in 1959, full retirement age 66 and 10 months, reached in 2026. The career is a steady $60,000 in today's pay from 22 to 62, so the lowest of the 35 years used is worth $46,473 after indexing. Here is what one more year of pay in 2026 does:
| Earnings in 2026 | AIME | PIA | Monthly gain |
|---|---|---|---|
| $40,000 | $3,875 | $2,274.90 | $0.00 |
| $60,000 | $3,908 | $2,288.20 | $13.30 |
| $90,000 | $3,979 | $2,316.70 | $41.80 |
| $150,000 | $4,122 | $2,374.00 | $99.10 |
| $184,500 | $4,204 | $2,406.80 | $131.90 |
Two lessons. A year below the lowest of the 35 adds nothing at all: it is simply not used. And the gain is modest even for a big year, because only the difference between the new year and the dropped one enters, divided by 420 months, then passed through the 32% or 15% bracket of the formula. On the other hand, it is paid for life and grows with every future COLA. Workers with fewer than 35 years gain far more, since their new year replaces a zero.
Recomputation and delayed credits together
If you work past full retirement age without claiming, both mechanisms run. Each month without benefits earns a delayed retirement credit until 70, and each year of high pay can raise the PIA to which those credits apply. Someone with a $2,274.90 PIA who waits from 66 and 10 months to 70 gets $2,851 a month; if a 2026 year at $90,000 lifts the PIA to $2,316.70, the same wait gives $2,903. Someone already collecting can still add credits only by a voluntary suspension.
Practical points
- Check your earnings record each year: the recomputation uses what is posted there. A missing W-2 year means a missing raise.
- The raise from a recomputation appears from January of the year after the earnings, not right away.
- Payroll tax stops counting toward your record above the year's taxable maximum, $184,500 in 2026, but Medicare tax keeps applying to every dollar.