Many Americans count on Social Security for income during their retirement. But if you plan to start taking benefits early, you might not know about a rule that can cut your monthly payments, leading to financial issues.
This rule, called the earnings test, affects those who keep working while also getting Social Security before reaching their full retirement age (FRA). This cut, along with the permanent reduction from taking benefits early, can leave you with much less money than expected—even causing your whole benefit to be withheld in certain months. Understanding eligibility requirements and claiming strategies can help retirees navigate these challenges.
Key Takeaways
President Trump promises to protect Social Security but millions of Americans face cuts due to early claiming and earnings tests.
- Americans who claim Social Security before full retirement age (67) receive permanently reduced monthly payments, up to 30% less.
- Working while collecting Social Security before reaching full retirement age can further reduce benefits under the earnings test.
- President Trump’s promises to protect Social Security clash with ongoing financial issues and potential future cuts unless significant reforms are made.
Financial pitfall of early Social Security claims
Americans can start getting Social Security benefits at 62, but there’s a catch. Your monthly checks will be smaller for life if you don’t wait until full retirement age, which is 67 for many. Starting benefits at 62 means a permanent cut of up to 30% in what you get monthly.
Many don’t know that if you keep working while collecting Social Security before hitting your full retirement age, the earnings test might reduce your benefits even more. You’ll lose $1 in benefits for every $2 earned over $23,400 if you’re not yet at full retirement age for the whole year. For those reaching full retirement age in 2025, it’s $1 taken for every $3 earned over $62,160.
This might leave early claimers with little or no Social Security money some months if they work and make more than the limit. Though these withheld benefits are recalculated and given back once you hit the full retirement age, it won’t help right away if you need Social Security for living expenses now.
Trump’s stance on Social Security
President Donald Trump has often said he wants to protect Social Security benefits for retirees. He has claimed that the biggest threat to Social Security is illegal immigration, saying that undocumented immigrants take away resources meant for American citizens.
However, Social Security benefits are only for legal workers who pay payroll taxes during their careers. Immigrants without legal status can’t get Social Security benefits unless they get legal work status and pay taxes like everyone else.
The real financial risk for retirees isn’t unauthorized immigration. It’s the unexpected benefit reductions that can happen if you claim early or due to the earnings test. Many Americans, no matter their political views, don’t know about these rules or how they might affect financial security in retirement.
Trump’s promises to protect Social Security clash with the program’s ongoing financial issues. Without changes, Social Security’s funds could run out in the 2030s, leading to benefit cuts unless new funding is found. While Trump has vowed not to cut benefits, his administration didn’t take significant steps to fix Social Security’s long-term financial problems.
Early claiming and the earnings test
Social Security is very important for many Americans’ retirement plans, but choosing when to claim it is crucial.
Claiming benefits early means you get a smaller monthly payment for life. Starting payments at age 62 might seem smart, but if you’re still working, part or all of your Social Security could be reduced by the earnings test.
Retirees hoping to boost their income with Social Security might struggle to pay for necessities right away.
Avoiding benefit reductions
To avoid surprise money problems, if you’re thinking about claiming Social Security early, consider these important points:
Wait until full retirement age or later – Holding off on claiming benefits can boost your monthly check and prevent cuts.
Know the earnings test – If you plan to work, keep your earnings below the limit to avoid losing benefits.
Include other income sources – Depending too much on Social Security while working can be risky if your benefits are cut.
Get financial advice – Talking to a financial advisor can help you find a balance between your income, Social Security, and retirement goals.
Although you do get back any withheld benefits later, the timing can really affect your money plans in the years before full retirement.
Social Security reform: what’s next
Social Security remains a hot-button issue. With concerns over the program’s long-term funding and potential future cuts, many Americans are looking for clear policy solutions.
Trump’s continued promises to protect Social Security will likely be a major talking point. However, experts argue that simply preserving the system in its current form is not enough—structural reforms will be necessary to ensure future retirees receive full benefits.
With millions of Americans at risk of unknowingly losing part of their Social Security income, understanding the system’s rules is more important than ever. Those approaching retirement must plan strategically to avoid unnecessary benefit reductions and ensure long-term financial security.
By making informed decisions, retirees can maximize their Social Security benefits and avoid the pitfalls that could otherwise leave them with less income than expected.
