Congress is looking to repeal a Social Security rule that impacts retirees who are still earning

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For millions of Americans, signing up for Social Security isn’t a chance to exit the workforce but simply an opportunity to add some passive income while still working. It’s surprisingly common for beneficiaries to be actively employed while collecting their benefits.

According to research by the Center for Retirement Research at Boston College (1), a whopping 43% of Social Security beneficiaries had at some point between 1992 and 2022 combined earnings from work with benefits. In other words, a large swathe of older Americans decided that Social Security wasn’t enough to enable a full retirement.

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Now, Congress is considering scrapping a rule that penalizes this cohort of working beneficiaries.

New law could scrap income tests

In April 2026, House Representative Greg Murphy, R-N.C. and Senator Rick Scott, R-Fla., introduced the Senior Citizens’ Freedom to Work Act (2) to repeal the Retirement Earnings Test (RET) (3), which defers benefits to some people who are below the Normal Retirement Age (NRA) and still earning an income.

For decades, the RET has allowed the Social Security Administration to claw back (4) some benefits from individuals who earn above specific thresholds every year. In 2026, the threshold is $24,480 for anyone reaching their NRA in 2027 or later. The SSA withholds $1 for every $2 earned above this limit.

For those reaching their NRA in 2026, there’s a lot more room for income. The threshold is nearly triple: $65,160 and only $1 for every $3 in income is withheld. As for those above their NRA, there is no limit and no withholdings, which means even a six- or seven-figure salary would have no impact on their benefits.

Critics of this rule, such as Rachel Greszler, visiting fellow at the Economic Policy Innovation Center (EPIC) (5), argue that it disincentivizes older Americans who want to remain employed. “The federal government should not penalize older Americans or make it harder for them to remain in the workforce,” Greszler insists.

Representative Murphy echoed this sentiment while introducing the new act. “Current law unnecessarily complicates seniors’ right to access the benefits they paid into for the entirety of their careers and must be done away with,” he said.

However, some industry experts are warning that repealing this rule could put even more pressure on the Social Security Trust Fund that is already strained and heading for a 24% cut to all benefits by as early as 2032 (6). So, even if the RET were repealed, a 62-year-old beneficiary who is actively working could keep more of their benefits now but face a drastic cut to them six years down the road.

“If this gets passed, it’s another hit to the system. And with the current direction of Social Security, I wouldn’t bet against this being one more step toward accelerating its long-term strain,” Kevin Thompson, CEO of 9i Capital Group, told Newsweek (7). “At some point, lawmakers need to focus on funding Social Security, not continuing to chip away at it.”

What can you do?

Repealing the RET could impact you even if you’re young or not working while collecting benefits. This is why it’s important to monitor the new proposal and prepare for any outcome by thinking about alternative ways to earn a passive income.

For example, passive income from rental properties could be a potential backup if benefits are cut in the near future. Rental properties have long been a proven source of steady, passive income for high-net-worth investors. However, the time, effort and costs involved in managing and maintaining multiple properties prevent many from investing.

Mogul offers one way to address this. The real estate investment platform offers fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for making a hefty down payment or taking late-night tenant calls.

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Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.

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Get some help

If you’re struggling to keep up or worried about other potential changes to the Social Security system that could impact you, working with an experienced financial planner could ease those concerns. A qualified professional can help keep an eye on any changes that impact your retirement and help you plan around them.

But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That’s why finding reliable advisors is crucial.

These days, finding the right advisor is simpler than ever with Advisor.com, which connects you with licensed financial professionals in your area — for free — who can provide guidance that is personalized to your needs.

For example, a professional advisor can help you determine how many years you have left to invest before retirement and assess your comfort level with market fluctuations — two key factors in building the right asset mix for your portfolio.

Through Advisor.com, you can schedule a free, no-obligation consultation to discuss your retirement goals and long-term financial plan.

Ultimately, with a professional retirement planner at your side and a few good investment moves, you might be able to bolster your financial security regardless of what happens to Social Security in the near future.

Congress is looking to repeal a Social Security rule that impacts retirees who are still earning — is it the right move?

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