Working and Claiming Social Security Early Could Cost You Thousands in Lost Benefits. Here's Why That Could Actually Be a Good Thing.
Claiming Social Security benefits early can lead to significant penalties, reducing monthly checks by up to 30%. Additionally, earning above a certain threshold while receiving benefits can further decrease payments due to the earnings test. However, once individuals reach their full retirement age, they may see an increase in benefits that compensates for previous losses.
- ▪Claiming Social Security before full retirement age can reduce benefits by up to 30%.
- ▪The earnings test penalizes early claimers who earn above a specific limit, resulting in further reductions in benefits.
- ▪Once individuals reach their full retirement age, the Social Security Administration recalculates benefits, potentially increasing payments for those who lost money due to the earnings test.
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Working and Claiming Social Security Early Could Cost You Thousands in Lost Benefits. Here's Why That Could Actually Be a Good Thing. Kailey Hagen, CFP, The Motley Fool Sat, May 23, 2026 at 8:30 AM PDT 3 min read You might already know that claiming Social Security can result in a pretty steep penalty. Those who sign up as soon as they're eligible shrink their checks by up to 30%, and that reduction is usually permanent. But for some early Social Security claimers, that's not the worst of it. They can lose even more from their checks if they earn more than a certain amount from their jobs. However, there's actually a hidden upside to that.
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