For millions of retirees, Social Security isn’t just helpful—it’s essential. According to a recent Gallup poll, 60% of retirees say Social Security is a major source of their income, while another 28% say it plays a minor role. That’s nearly 9 out of 10 retirees depending on those monthly checks in some way.
So, if you’re banking on Social Security for retirement, it’s crucial to understand the rules. A few overlooked details can seriously reduce your benefits—sometimes by hundreds or even thousands of dollars. Let’s break down three often-missed triggers that could shrink your check.
Working Before Full Retirement Age
Planning to work while collecting Social Security? You might want to hit pause and check the rules first.
If you start collecting benefits before your full retirement age (which is between 66 and 67, depending on your birth year), your earnings can temporarily reduce your Social Security check. This is due to something called the retirement earnings test.
How It Works:
| Year | Earnings Limit | Reduction Rule |
|---|---|---|
| Before full retirement age | $23,400 | Lose $1 for every $2 earned above limit |
| The year you hit full retirement | $62,160 | Lose $1 for every $3 earned above limit |
The good news?
The money isn’t lost forever. Once you hit full retirement age, Social Security will recalculate your benefit to give you credit for the months when your benefits were withheld.
Still, if you’re planning to work part-time or full-time while claiming early, make sure you know how much it might cost you short-term.
Getting Remarried While Receiving Spousal or Survivor Benefits
Love can cost you—at least when it comes to Social Security.
If you’re receiving spousal benefits based on an ex-spouse’s record and decide to remarry, you could lose those benefits. To qualify originally, you must have been married to your ex for at least 10 years and divorced for at least 2 years (unless your ex is already receiving benefits).
Here’s the catch:
- Remarrying disqualifies you from continuing to collect spousal benefits based on your ex.
- You’ll only be eligible for benefits based on your new spouse’s record—and only if they’ve started collecting.
Important exception: If you’re receiving survivor benefits (due to the death of a spouse), remarrying after age 60 does not affect those benefits.
Earning More or Moving to a Different State
Even though Social Security payments aren’t taxed by the SSA directly, taxes can take a chunk out of your benefit depending on your total income and where you live.
Things to watch for:
If your combined income goes above certain thresholds, part of your Social Security becomes taxable. Combined income includes:
- Half of your Social Security benefit
- Adjusted gross income (AGI)
- Any nontaxed interest, like municipal bonds
- Once you pass the income limit, you may owe federal taxes on up to 85% of your benefits.
Most states don’t tax Social Security, but nine states still do. So before you relocate for warmer weather or to be near family, it’s worth checking the tax rules in that state. You don’t want any surprise deductions when tax season rolls around.
Final Thoughts
Social Security might seem like a set-it-and-forget-it deal—but it’s not. These small details can have a big impact. Whether you’re planning to work a bit longer, thinking about remarrying, or considering a move, it pays to understand how those decisions affect your benefits.
