Early Social Security claimers risk losing up to 30% of monthly checks due to obscure rule

From Nasdaq: 2025-03-08 16:00:00

Claiming Social Security at age 62 may reduce checks by up to 30% and could lead to further losses due to an obscure rule. Many Americans choose to retire later, but it’s possible to claim benefits while working. The earnings test may withhold money from checks if job income exceeds certain limits, such as $23,400 under full retirement age (FRA). Once FRA is reached, withheld funds are returned and benefits increase. Consider delaying application until retirement or FRA to avoid penalties. Scaling back work hours may also help avoid earnings test restrictions. Earnings test limits tend to rise annually.

Some may face months without benefits due to the earnings test, but withheld funds are returned at FRA. Social Security secrets could boost retirement income, such as receiving an extra $22,924 annually. Learning how to maximize benefits can provide confidence in retirement. The Motley Fool provides disclosure policy.



Read more at Nasdaq: This Could Cost Early Social Security Claimers Some — or All — of Their Monthly Checks