Social Security Warnings

With the cost of living continuing to rise, many older adults receiving Social Security benefits are going back to work to make ends meet. If you decide to work, you might be surprised to see your monthly Social Security benefits decreasing in 2026, making it even more challenging to keep up with the cost of housing, utilities, and groceries.

The Social Security Administration (SSA) and AARP are alerting Social Security recipients who are working about rule changes that are stricter in 2026 than in past years. While you can still work and get Social Security at the same time, SSA has placed a limit on how much you can earn and still receive full benefits.

SSA says, “If you are younger than full retirement age and earn more than the yearly earnings limit, we may reduce your benefit amount.”

Social Security’s full retirement age (FRA) is:

• Between 66 and two months and 66 and 10 months for those born between 1955 and 1959

• 66 for people born in 1954 or earlier

SSA uses a specific formula to determine the pay reduction for workers:

• For those who reach full FRA, SSA will deduct $1 in benefits for every $3 earned above a different limit. The limit on your earnings in 2026 is $65,160, a $3,000 increase from the 2025 limit of $62,160. SSA will only count your earnings up to the month before you reach your FRA, not your earnings for the entire year.

Beginning with the month you reach FRA, your earnings will no longer reduce your Social Security benefits, regardless of how much income you earn. What the SSA will do is recalculate your benefit amount to account for any months in which payments were reduced or withheld because of excess earnings.

Are You Going Back to Work?

Some older adults who have retired, including those receiving Social Security, return to work, and the most common reason is to boost their income.

“Nearly half of older workers surveyed by T. Rowe Price said financial concerns kept them in the labor force,” an AARP article said. “But, it’s far from the only reason. Almost as many (45%) choose to work for the social and emotional benefits.”

Going back to work does not necessarily mean working for your former employer or even working in your former profession. Very few retirees choose to resume their previous careers, according to Judith Ward, a certified financial planner and thought‑leadership director at T. Rowe Price. Instead, many pursue jobs in industries outside of their expertise.

Returning to work also does not mean you have to take on a full-time schedule. Keep in mind that if you receive Social Security, your benefits may be reduced in 2026 if you exceed SSA’s yearly earnings limit.

You may want to consider working part-time so that you can “maintain time for other activities or goals that are important to your retirement lifestyle,” Kerri Anne Renzulli, a personal finance reporter, wrote in an article for AARP.

“Whatever your preference, carve out time to cast a wide net and explore a variety of opportunities, from jobs for former employers or clients to consulting work, substitute teaching, or gig-economy jobs with a ride-share or food delivery service such as Uber, DoorDash, or Postmates,” Renzulli continued. “Also, think about the level of responsibility you want to take on and whether you want a structured or flexible work schedule, an in-person or remote job. ”

Remember that once you hit FRA, your Social Security benefits are safe from reduction, no matter how much you earn in your new job.

How To Make The Most Of Your Social Security

At some point in your 60s, your thoughts turn to retirement. Before leaving your job, however, it is essential to make a financial plan to determine how you will cover your expenses in the future. As you review your savings and retirement accounts, you should also factor in your Social Security benefits.

Since you can claim Social Security when you turn 62 years old, it’s important to take steps to protect and possibly increase your overall lifetime income.

Here are five ways that can help you make the most of your Social Security benefits.

1. Review Your Benefits Estimate

It’s important to know your estimated benefits to better plan for your retirement. You can create an account on SSA’s website to review your personalized estimates. SSA recalculates your benefits each year based on your new earnings.

Knowing what you may potentially receive in benefits may lead you to delay filing for Social Security so that you can increase your lifetime income.

2. Review Your Earnings Record

Every year, your employer reports your earnings to the SSA, which uses this information to determine your Social Security benefits.

You can access your earnings history by logging in to your online SSA account and reviewing your earnings. If you discover missing earnings, find proof, such as a W-2 form, tax return, or pay stub, and report it to the SSA.

Correcting errors in your earnings history will lead to revised benefit estimates. This new calculation can help you decide whether you want to retire early and receive Social Security or work a while longer before filing for your benefits.

3. Review Your Debts and Spending Habits

Many people claim Social Security early to help cover living expenses. However, reducing those costs might allow you to claim your benefits later. Review your debts to identify which ones you can eliminate now, and evaluate your spending habits to reduce expenses. By doing these reviews, you may be able to delay claiming Social Security benefits.

4. Determine When to Claim Your Benefits

Your financial circumstances will more than likely influence when you file for your Social Security benefits. But keep in mind that the longer you work, the more benefits you are likely to receive. Working extra years can increase your lifetime earnings, including your 35 highest-earning years, which SSA considers when deciding on the amount of benefits you will receive.

5. Create a Tax and Withdrawal Strategy

Some retirees draw income from their investment portfolios to cover living expenses before applying for Social Security. This strategy gives your Social Security benefits time to increase, potentially leading to lower taxes and smaller required minimum distributions (RMDs). RMDs are mandatory annual withdrawals from tax-deferred retirement accounts that you must make once you turn 75. The RMDs are equal to a percentage of your portfolio’s value each year.

Links:
https://www.aarp.org/money/retirement/ask-before-you-unretire/
https://money.com/protect-social-security-income-60s/