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KEY TAKEAWAYS
- About four in ten Social Security beneficiaries are still working, with the majority having a part-time job.
- Experts have said that Social Security benefits are not keeping pace with retirees’ rising expenses, leading many to cut their spending or return to work.
While most Americans stop working and begin to live off their retirement savings and Social Security benefits—many still need to work to keep up with their expenses, a new report found.
In 2022, approximately 40% of Social Security recipients worked at some point after claiming benefits, according to an analysis from 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 up with retirees’ rising expenses. Between 2010 and 2024, the annual cost-of-living adjustments for Social Security have not kept pace with inflation, resulting in a loss of approximately 20% of buying power for beneficiaries, according to a report by The Senior Citizens League.
Why This Matters
This number shows that many older Americans are still having to work even after receiving their benefits. For those who do not want to work while receiving Social Security benefits, it is essential to set aside enough money for retirement now, as benefits alone are usually not enough to sustain many retirees.
Why Beneficiaries Are Still Working
About 68% of the beneficiaries who are still working claimed their Social Security benefits before their full retirement age.
Researchers at Boston College found that early claimants who are still working are less likely to have a college degree or have a managerial or professional occupation compared to claimants who claimed their benefits after the FRA. This group was also less likely to report they were in good health than those who waited until the FRA.
“For the early claimants, this pattern is consistent with using Social Security benefits to supplement reduced earnings while gradually transitioning out of the labor force,” the researchers wrote.
About one in three beneficiaries who are still working claimed their benefits between the FRA and 69. More beneficiaries who claimed at or after the FRA worked full-time rather than part-time—a trend that is flipped for those who claimed their benefits early.
Early Social Security claims are subject to an earnings test, which discourages full-time work because it reduces benefits. Yet, when claiming after the FRA, the earnings test no longer is a factor.
What Social Security Beneficiaries Are Dealing With Now
One reason that some beneficiaries may be going back to work is that their finances are being stretched.
Recently, Social Security beneficiaries have been facing increased financial stressors, which 2026 benefits may not fully account for and could lead to more retirees returning to work.
Next year, premiums for Medicare Part B, which about 63 million disabled and older Americans have, will eat into beneficiaries’ payments. Yet, Social Security will not keep pace with the cost of the federal insurance used by many beneficiaries, as benefits will only increase by 2.6% next year.
Other increases in grocery and prescription drug prices are also digging into many seniors’ budgets. In a recent Nationwide survey, about half of retired Social Security recipients reported cutting discretionary spending, and over a third said they are having to cut back on essentials.
