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Since the 1930s, Social Security’s Retirement Earnings Test (RET) has impacted the finances of many retirees. It’s been amended over the years but, as of 2026, it reduces the Social Security benefit payments of many seniors who continue working after claiming Social Security benefits before their full retirement age (FRA). Under the RET’s restrictions, retirees who are still under their FRA — which, for these purposes, would be 67 — can have their Social Security benefits reduced if they continue to earn income over certain annual thresholds.
However, that could change if a recently proposed bill is passed by legislators. Introduced by Florida Senator Rick Scott and North Carolina Representative Greg Murphy in April 2026, the Senior Citizens’ Freedom to Work Act advocates that Social Security benefits should not be reduced for seniors who choose to stay in the workforce, regardless of their age or income. While there’s much discourse about the future of Social Security’s impending insolvency, this proposal could provide a financial boon to millions of Americans in the present.
According to the Bureau of Labor Statistics (BLS), there were almost 11.4 million Americans over the age of 65 working in 2025, and more than twice that amount between the ages of 55 and 64. Since you can begin claiming reduced Social Security benefits as early as 62, this means there are millions of people who are either already eligible to receive benefits or are fast approaching eligibility who could be affected if this bill passes.
Read more: 11 Signs You’re Wealthier Than The Average Retiree
Understanding how RET limits affect seniors
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In 2026, the maximum amount a retiree under their FRA can make per year before their benefits are reduced is $24,480, with one exception: The Social Security Administration (SSA) allows individuals to make up to $65,160 (as of 2026) during the year in which they reach their FRA. For every $2 someone earns over the regular lower threshold of $24,480 — or every $3 someone makes over the higher FRA year threshold — the SSA deducts $1 from their benefit payments. For some, this can make the decision to stay in the workforce feel financially impossible — either pushing them out entirely or causing them to reduce hours to avoid deductions. With that said, it’s worth noting that these deductions are later permanently factored into larger monthly payments after a person reaches their FRA.
On Congressman Murphy’s website, he refers to the existing RET model as “a bureaucratic hurdle that does more harm than good.” Whether this is true or not, its impact on American seniors is certainly palpable. In 2024, the median income for those aged 65 and older was $56,680, per the Census Bureau. So, whether they’re working full time or earning extra money through retirement side hustles, there are currently many eligible Americans making well over twice the lower RET threshold that likely face reduced benefits for continuing to work. While there are already solid reasons to collect your Social Security benefits early, freeing up the ability to continue working without facing a reduction in benefits could make the decision an easy one for many older Americans.
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