Retirement is one of the most anticipated moments for many people, especially those who have spent most of their lives working long hours. In any case, it’s important to understand how the retirement system works so as not to miss out on the opportunity for a better retirement. Thanks to the Cost-of-Living Adjustment (COLA), Social Security payments will increase by 2.8% in 2026. Workers are entitled to claim retirement benefits from the Social Security Administration (SSA) starting at age 62. However, they must wait a few more years if they want to receive their full payments.
It is important to review the requirements and consider each individual’s circumstance
The fact is, as many already know, workers must wait to claim their Social Security benefits if they want to receive full retirement payments. The adjustments focus on earnings limits and benefit reductions for those who collect Social Security before reaching full retirement age, known as FRA. This is the age at which people can retire and retain all of their benefits. To be eligible to receive monthly benefits, workers must meet certain requirements, such as having a Social Security Number (SSN), having contributed part of their earnings to the SSA retirement program for several years, and obtaining the 40 credits needed to collect payments, which are based on the amount of earnings. It is important to review the requirements and consider each individual’s circumstances in case they are not eligible for benefits.
In 2015, individuals received one credit for every $1,810 of earnings, with a maximum of four credits per year; by 2025, this amount will increase to $1,890. It’s important to note that anyone who has already reached Full Retirement Age (FRA) will not be affected by the new rules, ensuring that once FRA is reached, there is no cap on earnings and no reduction in benefits. For workers born in 1960 or later, FRA is 67. Workers can begin claiming payments at age 62, but the Social Security Administration recommends waiting until full retirement age to receive the full benefit amount.
Social Security work limits no longer apply, and benefit payments are not reduced
Thus, full retirement age is the age recommended by the Social Security Administration to receive full Social Security payments—100% of what a retired worker is entitled to. If you have already reached your Full Retirement Age (FRA), Social Security work limits no longer apply, and benefit payments are not reduced, regardless of your income. However, those who have not yet reached FRA should pay close attention. Working too much may temporarily eliminate some monthly payments, but overall, the positive change coming in 2026 is a higher income threshold, allowing retirees to earn more before their benefits are withheld. It’s also important to note that full retirement age depends on the worker’s birth year.
So, with that in mind, if you were born between 1943 and 1954, you are 66 years old. If you were born between 1955 and 1959, the full retirement age gradually increases to 67 for those born in 1960 and later. Social Security applies two different income tests, depending on whether the worker will reach early retirement age (FRA) during the calendar year and whether they will reach the maximum income threshold of $24,480 (2026) before losing benefits.
On the other hand, for workers who are under full retirement age (FRA) year-round, benefits are reduced by one dollar for every two dollars they earn above the annual threshold. For those who reach FRA during the year, the reduction is one dollar for every three dollars they earn above an upper threshold. It’s important to remember that, according to the Social Security Administration, a beneficiary whose full retirement age is 67 will receive 30% less if they retire at age 62. Therefore, it is recommended to review the specifics of each case.