Last Updated: December 30, 2025

It’s not uncommon for retirees to return to work—part-time or full-time—later on. However, increasing your income during retirement can trigger certain issues if you’re already claiming Social Security benefits. 

Mistake: Overlooking the impact of retirement work on your early benefits 

The good news is that once you reach full retirement age, you don’t have to worry about reduced benefits, no matter how much you make.

If you started claiming Social Security benefits before full retirement age, there are some things to consider:

• There’s an annual earnings limit of $24,480 as of 2026.¹ Once you reach that limit, the benefits you receive can be reduced, depending on your age. For instance, if you’re retired and working while still younger than your full retirement age2 (67 for those born in 1960 and later), Social Security will deduct $1 from your benefits check for each $2 you earn over $24,480 (though this drops to $1 for every $3 over $65,160 if you’re reaching full retirement age in 2026). Once you’ve reached your full retirement age you may keep all of your Social Security benefits, no matter how much you earn. 
• You can stop receiving Social Security benefits while you work, but you must apply for a “withdrawal of benefits” within 12 months of filing for Social Security. 

For those who think that they will want a change of career instead of a true retirement, it might make sense to file for benefits while looking for a job, but then suspend those benefits once they find work (as long as it’s within those 12 months). It’s important to avoid the mistake of believing that you can essentially stop and restart Social Security retirement benefits at any time. 

The good news is that if your income results in higher benefits down the road, due to paying your Social Security taxes on your second-act job, you’ll see your monthly payment adjusted upward. Just keep in mind other potential consequences.

Mistake: Working off the books

This is a Social Security mistake that you might make early on, before retirement, or during retirement. When you’re paid officially, you and your employer contribute to Social Security through payroll taxes, and that impacts your benefits. Watch out for these mistakes:

• If you’re an unpaid caregiver, you aren’t seeing benefits. Check with your state about arrangements that could result in being a paid caregiver and earning Social Security credits for what you do.
• Receiving money “under the table” for different jobs or work can impact your Social Security earnings and benefits later. For example, unreported tips or receiving cash for odd jobs won’t help you receive higher benefits.
• Having a business with your partner can result in unreported earnings as well. If you’re self-employed with a partnership structure but assign the bulk of “on paper” earnings to your LLC “general member” spouse, you won’t be paying as much in self-employment tax, but you also won’t be building as much in future Social Security benefits.

Carefully weigh your current tax savings by paying less in Social Security taxes against your potential monthly benefits later. Depending on your situation, whether you can claim spousal benefits and other factors, it might be a mistake to have unreported income.

Mistake: Overlooking the Social Security limitations related to your job

Pay attention to the retirement structures associated with certain public sector jobs. 

For example, in some cases, teachers aren’t eligible for Social Security benefits on their own and might end up with some type of reduced spousal benefits in addition to their pensions. The reason is that many teachers don’t pay into the Social Security system, as eligibility depends on the state and school district they work in. Some states offer options such as pension and other defined benefits, and the same applies to certain federal workers due to other retirement arrangements from their agencies.

Don’t make the mistake of assuming that every job is helping you build Social Security retirement benefits, because it might not be happening.

What about incorrect wage history?

One of the best things you can do is check your Social Security statement regularly. You should receive one each year. It details how many credits you’ve accrued, as well as helps you estimate your potential benefits. You can also see your wage history and verify that it’s accurate.

If your wage history is inaccurate and doesn’t reflect your true earnings, your benefits could be lower. Take steps to address the issue by contacting the Social Security Administration by phone, or by logging into your mySocialSecurity account. If you can document the issue with W-2 forms, tax returns and paystubs, you can fix the mistake and be properly credited.

SOURCES

1. “Cost-of-Living Adjustment (COLA) Information for 2026.” SSA.gov, Social Security Administration, https://www.ssa.gov/cola/. Accessed 15 December 2025.
2. Ibid.