The earnings test does not reduce lifetime Social Security benefits, on average. This is because any benefits lost to the earnings test lead to increased monthly benefit amounts when an individual reaches the full retirement age. For example, if an individual claims benefits at 62 in 2021 and receives $920 a month, but then returns to work for a year and has 12 months of benefits withheld, SSA would recompute the benefit at the person's full retirement age and pay $985 a month (in today's dollars) going forward. Thus, the earnings test shifts Social Security benefits from a time when a person is working to a time when they are more likely to be retired.
