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One of the hardest decisions you might make in your lifetime is pulling the plug on your career. It can be especially difficult if you love what you do. The good news is that you may continue working in some capacity even after retiring—employers may allow part-time work, consulting, or part-time jobs. If you claim Social Security while retiring this year, earning income could impact your benefits. Social Security’s earnings test sets a limit: this year, the cap is $24,480. Earnings up to this amount won’t affect your monthly benefits. However, if you exceed $24,480, $1 in benefits is withheld for every $2 earned. For those reaching full retirement age by December 31, the limit rises to $65,160, with $1 withheld for every $3 earned. Withheld benefits aren’t lost forever. Once you reach full retirement age, the Social Security Administration recalculates your benefits and pays back any withheld amounts over time. The earnings test doesn’t apply to retirees who have already reached full retirement age. Only job-related income counts toward the earnings test. Withdrawals from IRAs or brokerage dividends don’t count if you’re under full retirement age. If you claim Social Security early (before full retirement age), benefits are permanently reduced. Working while collecting Social Security can lead to significant deductions if earnings are high. For example, if you retire at 62 and earn $4,000 monthly, you might cover living costs without needing Social Security. In such cases, delaying benefits could be advantageous. Even if working while collecting Social Security, the $24,480 limit may not apply. Understanding the earnings test helps determine your best options for balancing work and retirement income.