The Senior Citizens’ Freedom to Work Act, introduced by Sen. Rick Scott (R-Fla.) and Rep. Greg Murphy (R-N.C.), would repeal the retirement earnings test. The earnings test currently reduces benefits for recipients who claim Social Security before reaching full retirement age and earn above federally set limits.
Under current law, beneficiaries under full retirement age—67 for most workers—can earn up to $24,480 in 2026 before benefits are reduced. The Social Security Administration withholds $1 in benefits for every $2 earned above that threshold.
"This test punishes workers between the ages of 62-66 who start to claim their benefits—benefits they are entitled to and have earned," stated Scott.
The Realtor.com report found that higher senior employment rates are associated with areas with elevated housing costs, suggesting that rising mortgage payments, insurance premiums, property taxes, and home maintenance expenses are contributing to more older Americans delaying retirement or seeking additional income later in life.
The Northeast recorded the nation’s highest senior workforce participation rates, coinciding with some of the country’s most expensive housing markets.
New Hampshire leads the nation, with nearly 24 percent of residents age 65 and older remaining in the workforce. Massachusetts, New Jersey, Vermont, Rhode Island, and Connecticut also rank among the top states for senior employment, according to the report.
During a March hearing of the Senate Special Committee on Aging, Scott said many older Americans are seeking “a new, purpose-driven chapter” after retirement through part-time work, volunteering, mentoring, or starting businesses.
“The truth is that retirement doesn’t have to be the end of one’s career,” Scott said. “For many, it’s the start of a new, purpose-driven chapter in their lives.”
Scott argued the earnings test discourages older Americans from remaining in the workforce at a time when many employers face labor shortages.
According to Scott, the Retirement Earnings Test was enacted during the Great Depression to push older Americans out of the workforce and open up jobs for younger workers. He said the policy reflects an outdated approach to retirement and labor that no longer fits today’s economy.
“This bill will get rid of the unfair Retirement Earnings Test so that seniors who want to stay in the workforce can do so without being punished or robbed of their hard-earned benefits,” Scott said.