It’s no secret that living in New York City is incredibly expensive.
By the time many locals are ready to sign up for Social Security, they are also ready to stop working—but high rent and pricey groceries often mean they simply can’t.
Whether you need a part-time job to make ends meet or you just want to stay busy by taking on freelance consulting gigs, you are absolutely allowed to work while receiving Social Security.
However, if you are under your full retirement age, there is an important financial hurdle you need to know about.
How the earnings test impacts your check
Even though Social Security allows recipients to hold down a job, those getting benefits prior to reaching full retirement age are subject to the program’s earnings test.
This dictates exactly how much wage-based income you can bring in before your benefits are temporarily reduced.
In 2026, the earnings test limit for workers who have not yet reached full retirement age is $24,480. If your income exceeds that specific limit, Social Security will withhold $1 in benefits for every $2 of income you earn above it.
What actually counts toward the limit?
Not all income is treated equally under the earnings test. If you are worried about your investment portfolio triggering a penalty, you can breathe a sigh of relief.
- Only wages, freelance pay, and consulting fees count toward the earnings limit.
- IRA withdrawals, dividends, and capital gains do not trigger benefit withholding.
The good news: withheld money isn’t lost forever
If you get caught in the earnings test trap and see a smaller monthly check, do not panic. You are not losing that money permanently.
Once you finally reach full retirement age—which is why the earnings limit disappears completely for New Yorkers still working at 70—the Social Security Administration will recalculate your monthly benefits.
They will eventually repay the money they previously withheld in the form of much larger monthly checks.
While your near-term income might be lower than expected, staying informed helps you properly budget for your future in the city.