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Congress considers repeal of Social Security earnings test
The proposal targets the Retirement Earnings Test, which in 2026 withholds $1 for every $2 above a $24,480 limit for people reaching normal retirement age in 2027 or later.
Congress is weighing changes to a Social Security rule that affects retirees who keep working, as lawmakers consider repealing the Retirement Earnings Test, or RET, according to Yahoo Finance. The RET allows the Social Security Administration to withhold some benefits for beneficiaries who earn above annual thresholds before reaching their normal retirement age. For 2026, the threshold is $24,480 for people reaching normal retirement age in 2027 or later, with the SSA withholding $1 for every $2 earned above that limit.
The rule is more permissive for people reaching normal retirement age in 2026, with a threshold of $65,160 and a withholding rate of $1 for every $3 earned above that amount, Yahoo Finance reported. For beneficiaries already above their normal retirement age, there is no earnings limit and no withholdings, meaning income does not reduce benefits.
Lawmakers introduced the Senior Citizens' Freedom to Work Act in April 2026, a step aimed at removing the RET penalty for working beneficiaries. The article also notes critics who argue the earnings test discourages older Americans from staying employed, citing concerns raised by Rachel Greszler, a visiting fellow at the Economic Policy Innovation Center.