Social Security’s $1-for-$2 Penalty: How Working a Part-Time Job Can Backfire

Résumé détaillé

Working part-time while collecting Social Security sounds like a smart financial move, but a little-known penalty can quietly erase your monthly check before you even realize it.

There's a reason a lot of older Americans opt to claim Social Security early rather than wait until full retirement age (FRA), which is 67 for those born in 1960 or later: They're ready to stop working and need income from Social Security to make that happen.

Social Security benefits can be claimed starting at age 62. Filing for benefits ahead of FRA will shrink them permanently in the process. But for some people, that hit is worth it if it means an early workforce exit.

There's a big difference between working part-time in your 60s and working full-time, though. A full-time schedule may be too much for you, and it may take you away from doing the things you love.

A part-time work schedule might offer you the best of both worlds. It could be your ticket to earning a decent chunk of money and staying just busy enough without feeling overwhelmed or constantly pressed for time.

But if you're going to work part-time while collecting Social Security, you'll need to be mindful of the program's rules. That's because earning too much money in that situation could result in the temporary loss of part -- or in some cases, all -- of your monthly Social Security check.

Many successful investors eventually reach the same moment. The saving is done, the portfolio is built, and the question quietly changes from how much can I grow this to how much can I take out? Get that second question wrong and decades of good investing can come apart in a handful of years.

Social Security's earnings test applies to recipients who are getting benefits prior to FRA. While this is something that's allowed, if your earnings exceed a certain limit, you risk having benefits withheld temporarily.

That limit changes yearly. In 2026, it's $24,480 for people who won't reach FRA by Dec. 31.

If you earn more than $24,480 this year in that situation, you'll have $1 in Social Security withheld per $2 of income.

Début de l'article, extrait de Yahoo Finance. Pour lire la suite, ouvrez l'article chez le média.