Part-Time Work in Retirement: Effects on Benefits and Taxes

Many people keep working after they stop their main career. The extra pay can help with bills, but it can also change how much of your Social Security you receive and how much tax you owe. This guide explains the main rules in plain English, using 2026 figures where the government publishes them. It is general education, not tax or personal advice.

Can you work and collect Social Security at the same time?

Yes. The Social Security Administration (SSA) describes a "retirement earnings test" that applies only to people below normal retirement age (NRA) (SSA: retirement earnings test). Your NRA depends on your birth year; our guide to choosing a retirement date covers how timing changes your benefit.

The test only matters if you claim benefits before NRA and earn more than a yearly limit. If you do, SSA withholds some benefits. If you have reached NRA, SSA says earnings in or after the month you reach NRA do not count toward the test.

What are the 2026 earnings limits and withholding rates?

Source: SSA retirement earnings test page. SSA says the higher limit applies only to earnings made in the months before you reach NRA.

Example: how withholding is figured

These are made-up numbers to show the arithmetic. Say a person is below NRA all of 2026 and earns $34,480. That is $10,000 above the $24,480 limit, so $5,000 of benefits would be withheld ($1 for every $2). Now say another person reaches NRA in 2026 and earns $71,160 before that month. That is $6,000 above $65,160, so $2,000 would be withheld ($1 for every $3).

Is withheld money lost?

SSA says withheld benefits are not "lost." Once you reach NRA, your monthly benefit is permanently increased to account for the months in which benefits were withheld. The SSA page does not give the amount of the increase, so ask SSA for a personal estimate.

Does working make your Social Security taxable?

It can. The IRS explains that you compare a "base amount" with one-half of your benefits plus all your other income, including tax-exempt interest. Wages count as other income (IRS Publication 915 (2025)). The base amounts it lists for tax year 2025 are below.

The IRS says that, generally, up to 50% of benefits will be taxable, and up to 85% can be taxable in the higher-income cases. In plain terms, "up to 85% taxable" describes how much of the benefit is included in taxable income, not a tax rate. Publication 915 has the worksheets. We did not check the 2026 edition, so confirm the amounts for your tax year.

Are payroll taxes still taken from wages?

Yes. IRS Publication 554 (2025) says wages are subject to withholding for income tax, Social Security tax and Medicare tax even if you are receiving Social Security benefits (IRS Publication 554). If you work for yourself, see our guide to retirement planning for the self-employed.

Can you keep saving to an IRA while you work?

Often yes. The IRS says there is no age limit on regular contributions to traditional or Roth IRAs, and your contribution cannot exceed your taxable compensation for the year. For 2026 the limit is $7,500, or $8,600 if you are 50 or older (IRS: IRA contribution limits). Whether a particular contribution is deductible or allowed for Roth depends on income rules we did not review.

Required minimum distributions (RMDs) are a separate matter. Pub. 554 says the required beginning date for an employer plan is generally April 1 of the year after the later of the year you reach age 73 or the year you retire from the employer maintaining the plan, and that a plan may require earlier payments. IRA rules differ; see RMD deadline traps.

What other effects should you check?

Extra income can also reach beyond Social Security. For example, income can affect Medicare premiums through an extra charge called IRMAA; see our IRMAA guide for the SSA's rules. Part-time income may also change how much you need to draw from savings; our guides to estimating retirement expenses and a retirement budget can help you test that.

Common mistakes

• Claiming early without checking the limit. Compare your expected pay with the 2026 limit before you claim.
• Overlooking the NRA-year rule. SSA says the higher limit applies only to earnings in months before the month you reach NRA.
• Assuming withheld benefits vanish. SSA says they are recovered through a permanent increase at NRA.
• Ignoring the tax on benefits. Wages can push more of your benefits into taxable income.
• Using old figures. Limits change each year.

Questions to ask a professional

• Given my birth year and planned income, would claiming now trigger withholding?
• How much of my benefit might be taxable this year?
• Does my income affect Medicare premiums?
• Which account should my savings go in?

Where gold and silver IRAs fit - and where they do not

Some retirees who keep working hold part of their savings in gold or silver. The arguments people make include diversification, a long record as a store of value and the appeal of a tangible asset. These are arguments, not guarantees, and this site makes no price forecast.

The costs and rules matter just as much. Our fee and risk guides cover custodian, storage and dealer charges and price risk. The IRS says a collectible acquired by an individually directed account is treated as an immediate distribution equal to its cost, but lists exceptions for certain gold, silver and platinum coins and for bullion of a certain fineness, "if a bank or approved non-bank trustee keeps physical possession of it" (IRS collectibles page). Our gold IRA guide, fee guide, risk guide and contribution limits guide explain the basics. This site does not say whether metals suit any one person.

What we did not check

We did not review the 2026 edition of Publication 915, how SSA counts wages versus self-employment income, the rule for the first year of retirement, state taxes, Medicare enrollment rules for workers, or IRA deduction and Roth income limits. Rules change each year, so confirm with the IRS, SSA and a qualified professional.