Many teachers, police officers and other public workers retire from their pension job and then keep working. Some substitute teach. Some take a security job, a part-time office job or work in a different field. If you also start Social Security before your full retirement age, you need to know about the earnings limit.
The earnings limit decides how much you can earn from work before Social Security holds back part of your check. For 2027 the limits go up.
The 2027 limits
| Your situation | Earnings limit | What happens above it |
|---|---|---|
| Under full retirement age for all of 2027 | $25,560 a year | $1 held back for every $2 over |
| Reaching full retirement age in 2027 | $67,920 a year | $1 held back for every $3 over |
| At full retirement age or older | No limit | Nothing held back |
For 2026 the limits are $24,480 and $65,160.
Full retirement age is 67 for anyone born in 1960 or later. Read more in full retirement age reaches 67.
Example 1: a substitute teacher
Maria is 63. She retired from teaching and started Social Security at $1,400 a month. In 2027 she substitute teaches and earns $31,560.
- Her pay is $6,000 over the $25,560 limit.
- Social Security holds back $1 for every $2 over, which is $3,000.
- Her yearly Social Security is $16,800. After $3,000 is held back, she gets $13,800.
Social Security does not take a little from each check. It usually holds back whole checks at the start of the year until the amount is covered. So Maria might get no check for January, February and March, then full checks for the rest of the year. The extra $1,200 held back is paid to her the following year.
Example 2: a retired police officer
David retired from the police force at 55 with a pension. At 62, he started Social Security at $1,600 a month. He now works full time in private security and earns $50,000 in 2027.
- He is $24,440 over the limit.
- Half of that, $12,220, is held back.
- He gets about $7,000 of his $19,200 yearly benefit.
For David, starting Social Security early while working full time does not make much sense. Waiting would give him a bigger check later.
Example 3: the year you reach full retirement age
Anna turns 67 in October 2027. From January to September she earns $75,000.
- Only pay before her birthday month counts.
- She is $7,080 over the $67,920 limit.
- Social Security holds back $1 for every $3, which is $2,360.
From October on, there is no limit at all.
The money is not lost
This is the part most people miss. Held-back money is not gone. When you reach full retirement age, Social Security raises your monthly check to make up for the months it held back. If you live an average lifespan, you get it back over time.
What counts and what does not
Counts toward the limit:
- Wages from a job
- Net earnings from self-employment
Does not count:
- Your teacher, police or government pension
- Interest, dividends and investment gains
- 403(b), 457(b), 401(k) and IRA withdrawals
- Rental income in most cases
- Social Security itself
This is good news for public workers. A large pension does not affect the earnings limit at all. Only work pay matters.
The special rule for your first year
In the year you retire, Social Security uses a monthly test too. You can get a full check for any month you earn less than $2,130 (in 2027) and do not do much self-employed work, even if your yearly pay is already over the limit.
This helps people who retire in the middle of the year. Pay you earned before you retired does not stop your checks after you retire.
Your pension plan has its own rules
The earnings limit is a Social Security rule. Your pension plan may also limit work after retirement, especially if you go back to work for the same school district or state employer. Some plans stop your pension if you return too soon or work too many hours. Read our guide to return-to-work rules before you take a job.
What to do
- Tell Social Security if you expect to earn over the limit. You can report it online, by phone or at an office.
- Think about waiting. If you plan to work full time, starting Social Security later often makes more sense.
- Plan for the held-back months. Keep some savings so a missing check in January does not hurt.
See how your pension and Social Security fit together in the pension and Social Security calculator.