The work doesn’t end when you claim Social Security

While most Americans stop working and start living off their retirement savings and Social Security benefits, many still need to work to keep up with their expenses, a new report shows.

In 2022, nearly 40% of Social Security recipients worked at some point after claiming benefits, according to an analysis by the Center for Retirement Research at Boston College. Some of these workers began receiving Social Security benefits before they retired. But others had to return to work to supplement their benefits to make ends meet.

Lawmakers and advocates have argued that Social Security benefits are not keeping pace with rising retiree expenses. Between 2010 and 2024, Social Security’s annual cost-of-living adjustments did not keep up with the rate of inflation, resulting in a loss of nearly 20% of beneficiaries’ purchasing power, according to a report from the Senior Citizens Association.

Why are beneficiaries still working?

About 68% of beneficiaries still working claimed Social Security benefits before reaching full retirement age.

Researchers at Boston College found that early claimants who were still working were less likely to have a college degree or to have a managerial or professional occupation than claimants who claimed their benefits after the FRA. This group was also less likely to report being in good health than those who waited until the FRA was released.

“For early claimants, this pattern is consistent with the use of Social Security benefits to supplement low earnings with a gradual transition out of the labor force,” the researchers wrote.

About one in three beneficiaries still working claimed their benefits between FRA and 69. And more beneficiaries who claimed at or after FRA were working full-time rather than part-time — a trend that reversed for those who claimed their benefits early.

Early Social Security claims are subject to earnings testing, which discourages full-time work because it reduces benefits. However, when claimed after an FRA assessment, the earnings test is no longer a factor.

What are Social Security beneficiaries dealing with now?

One reason some beneficiaries return to work is because their finances are under pressure.

Recently, Social Security beneficiaries have faced increasing financial pressures, which 2026 benefits may not fully address and may result in more retirees returning to work.

Next year, Medicare Part B premiums, which benefit about 63 million Americans with disabilities and older adults, will eat into beneficiary payments. However, Social Security will not keep up with the cost of the federal insurance many beneficiaries use, as benefits will increase by only 2.6% next year.

Other increases in grocery and prescription drug prices are also impacting the budgets of many seniors. In a recent nationwide survey, about half of retired Social Security beneficiaries reported cutting back on discretionary spending, and more than a third said they had to cut back on necessities.