Financial planning professionals serving clients in their late 50s and early 60s are generally aware of the rules that spell out how working income can affect Social Security benefits.
For clients younger than their full retirement age, there is a limit to what they can earn before some or all benefits are withheld. This is true whether they are receiving Social Security retirement or survivor benefits. Once the FRA is reached, clients can make as much as they want without affecting their monthly Social Security check.
If an earnings penalty applies, Social Security will adjust the benefit formula at FRA to treat the months that clients did not receive a check as if they had not elected benefits for that month—providing a benefit boost later on and ensuring fairness for working retirees.
Less understood, according to a new analysis by the Center for Retirement Research at Boston College, is just how many people are working while collecting Social Security, and who they are. Are they working out of necessity, or are there other motivations, such as maintaining social engagement? And what does the decision to work, effectively delaying some benefit payments, mean to their long-term retirement security?
It turns out, CRR researchers Siyan Liu and Laura Quinby detail, that working after claiming serves different purposes for different groups. Two-thirds of these worker-beneficiaries rely on Social Security to supplement reduced earnings and may have limited capacity to delay claiming. The remaining third maintain substantial earnings levels for several years, on average, suggesting greater financial flexibility to delay.
See also: Here’s how inflation is taking a toll on retirement
The decision to claim Social Security benefits, as the authors discuss, is conventionally viewed as a proxy for the decision to retire and stop working outright. The reality in 2025 is that claiming does not necessarily signal full retirement.
The authors point to the Census Bureau’s Current Population Survey to show that many older workers remain in the labor force even after becoming eligible for Social Security.
“Although the labor force participation rate declines sharply after people reach age 62, it remains above a quarter through age 70,” the authors note. “These relatively high labor force participation rates are consistent with recent studies showing that earnings constitute more than a fifth of income for households over age 65.”
The persistence of employment after typical claiming ages suggests that some workers claim Social Security and work at the same time. Understanding this behavior matters for evaluating households’ retirement preparedness, the authors insist, as well as the design of the program.
“If individuals who work after claiming are disadvantaged and rely on Social Security benefits to supplement reduced earnings, benefit cuts such as raising the FRA may hurt them disproportionately,” the paper warns. “Conversely, if they have the financial capacity to delay claiming, policymakers could encourage them to do so.”
Why work?
To assess the policy implications of working after claiming, the authors sought to establish the prevalence of this behavior, using the long-running Health and Retirement Study. They tracked individuals from age 56—when the vast majority are still in the labor force—to age 75, when most have fully retired.
“The HRS interviews respondents once every two years, with the first post-claiming interview in our sample typically occurring about one year after respondents have claimed their benefits,” the authors explain. “Hence, we observe any employment reported in that initial post-claiming interview as well as at two-year intervals thereafter.”
This longitudinal view shows that working after claiming Social Security retirement benefits is fairly common, with around 40% of older individuals reporting ever working after their claiming date—either because they start claiming before they retire, or because they go back to work after an initial retirement.
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