There are millions of Americans who rely on Social Security as a significant source of finance during their retirement years. However, as the end of 2025 comes closer, many experts are warning that unintentional actions could impact your benefits. It is therefore important to understand how certain situations may impact your benefits, so that you can take action to prevent financial instability.
Working Before Full Retirement Age
There are many retirees who choose to continue working part-time even after they’ve claimed Social Security. Yes, this may be seen as a way to increase your finances, but it also has limitations.
Depending on your birth year, the Full Retirement Age (FRA) varies between 66 and 67 years. If you haven’t reached FRA and you are earning above a certain limit, this could potentially reduce your benefits, temporarily. In 2025, the Social Security Administration (SSA) may reduce payments by $1 for every $2 earned above the annual limit if you are under FRA.
Simply put, if you earn $25,000 above the limit, your monthly benefits could be cut until you reach FRA. As soon as you reach FRA, your benefits are recalculated.
As an individual, if you want to claim benefits while working, check the limits and plan accordingly.
Having Your Benefits Garnished
Even though Social Security benefits are protected from creditors, there are still situations where your benefits can be garnished:
- Federal tax debts: The IRS can hold up to 15% of your benefits to cover unpaid taxes.
- Child support or alimony: If you need to pay child support or alimony, courts can order withholding from your Social Security checks to meet these conditions.
- Federal student loans: In some cases, overdue federal student loans can lead to benefit garnishments.
For some reason, if you miss or don’t pay the above, your Social Security check may be reduced to cover the payments.
Make sure you have no outstanding debts, if you do, consider making payment arrangements to avoid reduction on your benefits.
No Longer Meeting Eligibility Requirements
Social Security benefits are not guaranteed for everyone indefinitely. Certain conditions could lead to a reduction or stoppage:
- Returning to work in a foreign country: Certain retirees who live in other countries may find that their benefits are reduced or suspended as a result of certain rules and restrictions.
- Getting benefits based on someone else’s record: If you qualify for survivor or spousal benefits, your checks may be impacted by changes in your marital status or the eligibility of the principal earner.
- Falsifying income or status: Giving false information, whether on purpose or by mistake, may result in an audit and payment suspension until problems are fixed.
Keeping your information up-to-date with the SSA is critical. Even minor errors in reporting income, address changes, or marital status can affect eligibility.
How to Protect Your Social Security
Retirees can take steps to safeguard their benefits:
- Be mindful of your FRA and income limits. Avoid surprises if you continue working.
- Stay on top of debts. Make sure you are up to date with your debts to avoid garnishment.
- Keep your records accurate. Be sure to update your personal details on your Social Security account.
- Consult a professional if needed. If you are unsure or need any assistance, be sure to contact a financial advisor to help you make good decisions.
Final Thoughts
Social Security is indeed the financial backbone for millions of Americans, and it is important that beneficiaries know about their benefits, as well as what affects their benefits. Beneficiaries must be sure to plan ahead, keep updated with verified information and seek assistance if they need to. This is important for making proactive decisions to ensure financial security.