Break-Even Earnings: When Every Check Is Withheld

Below full retirement age, every check for the year is withheld once earnings reach the exempt amount plus twice your annual benefit. Withholding runs at $1 for every $2¹ above the limit.

The earnings-test calculator prints this figure as break-even earnings for the benefit you enter. This page is the arithmetic behind it.

The two formulas

Your situation in the calendar year	Exempt amount, 2026	Withholding rate	Break-even earnings
Under full retirement age all year	$24,4802	$1 withheld for every $2 over the limit1	limit + 2 × annual benefit
The year you reach full retirement age	$65,1603	$1 withheld for every $3 over the limit4	limit + 3 × benefits for months before that month
From your full-retirement-age month	none	none	not applicable

The multiplier is the withholding rate turned around. At one dollar withheld per two dollars over the limit, it takes two dollars of earnings to withhold one dollar of benefit, so the whole year is absorbed at twice the annual benefit above the limit.

Below full retirement age

Example. A hypothetical person is under full retirement age for all of 2026 and receives $2,000 a month, which is $24,000 for the year. Twice that is $48,000. Added to $24,480², the break-even is $72,480 of earnings. At that point no benefit is payable for 2026.

Example. The same 2026 test with a $1,500 monthly benefit gives $18,000 a year; twice that is $36,000, and the break-even falls to $60,480. A smaller benefit is exhausted by less earnings, so the break-even moves with the benefit, not only with the limit.

In the year you reach full retirement age

Two things change at once, and both push the figure up sharply. The exempt amount rises to $65,160³, and the rate falls to $1 for every $3⁴, so three dollars of earnings are needed to withhold one dollar of benefit.

Only part of the year is at risk. Earnings from your full-retirement-age month onward are not counted, and the benefits for those months cannot be withheld.

Example. A hypothetical person reaches full retirement age in October 2026 and receives $2,000 a month. Nine months — January to September — are exposed, which is $18,000 of benefit. Three times that is $54,000, so the break-even is $119,160 of earnings.

The ceiling on withholding

Whatever the earnings, the charge stops when the year’s benefits run out. POMS RS 02501.095 states that excess earnings are charged “until the excess is recovered or until all the benefits have been withheld for the year”, and adds: “Do not charge the excess for one year into the next year.”

Earning past the break-even therefore withholds nothing further. It also does not create a debt, and it does not reduce the following year, which is tested on its own against its own exempt amount.

What the figure does not mean

Reaching the break-even is not the same as losing the money. Withheld benefits are credited back through a permanently higher benefit at full retirement age⁵, so the months withheld come out of the early-claiming reduction and raise every later payment, as the recomputation at full retirement age sets out.

The break-even also assumes the annual test. In a grace year the monthly test can pay a full benefit for any month at or under the monthly limit however large the annual total is, which is set out in the grace year rule.

At what income do I lose all my Social Security benefits?

Below full retirement age, at the exempt amount plus twice your annual benefit. For 2026 that is $24,480² plus two years of your benefit — on a $2,000 monthly benefit, $72,480 of earnings.

How do I calculate my own break-even earnings?

Multiply your monthly benefit by 12, double it, and add the exempt amount for your situation. In the year you reach full retirement age, count only the benefits for the months before that month and multiply by three instead.

Does the break-even change in the year I reach full retirement age?

Yes, and it rises. The exempt amount becomes $65,160³, the rate becomes $1 for every $3⁴, and only the months before your full-retirement-age month are exposed.

What happens if I earn more than the break-even?

Nothing further is withheld. All the benefits for that year are already withheld, and the excess is not carried into the next year.

Is there a break-even after full retirement age?

No. No earnings test from the month you reach full retirement age⁶, so from that month earnings of any size withhold nothing.

What is the break-even for 2027?

It cannot be computed yet, because the 2027 exempt amounts are not yet announced. Social Security announces them with the cost-of-living adjustment in mid-October 2026⁷; the 2027 earnings-limit page carries the mechanism and no projected figure.