Social Security Rule Change Could Take Nearly $1,000 Away From Some Seniors
Summary
In 2027, Social Security beneficiaries who remain below full retirement age all year can earn up to $25,560 before the earnings test applies, up from $24,480 in 2026. The Social Security Administration withholds $1 in benefits for every $2 earned over that limit, so someone earning $27,500 could have $970 withheld; this is a withholding of benefits, not a tax.Key Facts
- The 2027 earnings-test limit for beneficiaries below full retirement age all year is $25,560, or $2,130 per month.
- The 2026 limit for that group is $24,480, making the 2027 limit $1,080 higher.
- For each $2 earned above the limit, Social Security withholds $1 in benefits.
- A beneficiary earning $26,560 in 2027 could have $500 withheld; one earning $27,500 could have $970 withheld.
- For people who reach full retirement age during 2027, the limit is $67,920 for earnings received before the month they reach that age; $1 is withheld for every $3 above it.
- The maximum amount of earnings subject to Social Security payroll tax will rise from $184,500 in 2026 to $192,300 in 2027.
- Employees pay 6.2 percent in Social Security payroll tax on wages up to the taxable maximum, and employers pay another 6.2 percent. The article says self-employed workers could pay nearly $967 more in taxes and employees nearly $500 more.
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