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The average monthly Social Security benefit for retired workers is now just under $2,000, and tens of millions of Americans rely on these hard-earned benefits to supplement their retirement income.
However, while retirees should try not to rely solely on Social Security benefits — especially now that there are concerns about the program’s long-term viability — the reality is that for many people, these monthly checks are the largest source of cash they will have once they retire.
As a result, you should try to keep your Social Security benefits from being lost or reduced. That is not always as simple as it should be.
While many people believe their benefits will continue indefinitely, the truth is that even minor changes in your personal circumstances can have a significant impact on the Social Security checks you receive in retirement.
And understanding the potential challenges you may face is critical if you want to plan a retirement that is not only comfortable, but also resilient.
3 ways you can lose your Social Security benefits
There are a few different ways you could lose some or all of your Social Security benefits in retirement, including the following:
Working before full retirement age
If you claim Social Security before you reach your full retirement age and continue to work, your benefits may be temporarily reduced if your earnings exceed the Social Security Administration’s annual cap. In 2025, anyone under the full retirement age can earn up to $22,560 per year before losing benefits.
The reduction you may face is equal to $1 in benefits for every $2 earned above the limit. When you reach full retirement age, the threshold rises to $59,520, and the reduction becomes $1 for every $3 over the limit, but only for the month you reach that age.
After full retirement age, there are no earnings limits, so your benefits are guaranteed regardless of how much you earn.
However, this isn’t a permanent loss because the Social Security Administration recalculates your benefits to give you credit for months when payments were withheld, so your lifetime benefits may not decrease. However, in order to avoid surprises, you should carefully plan your retirement and working schedule.
Having your benefits garnished or taxed
Even though Social Security retirement benefits are generally secure, they can be reduced in certain financial situations. Here’s how that could happen:
Garnishment for federal debts: If you owe money for federal taxes, certain student loans or unpaid child support, the government can withhold a portion of your Social Security benefits to satisfy these debts.
Taxation: Depending on your total income, up to 85% of your Social Security retirement benefits can be taxed. While this isn’t a total loss, it does reduce the net amount you actually receive.
No longer meeting the eligibility requirements
While Social Security retirement benefits are generally earned for life, some aspects of your eligibility can affect how much you receive:
- Spousal or survivor benefits: If you are receiving benefits as a spouse or survivor, these can change if your marital status changes. For example, if you’re a divorced spouse remarrying before age 60 or if a child receiving benefits ages out, it could impact the total amount of your benefits check.
- Eligibility verification: The Social Security Administration may periodically request documentation to confirm eligibility, such as proof of age. Failing to provide the required information can delay or temporarily halt your benefits.
- Living abroad or non-citizen status: Some retirees who live outside the U.S. may face restrictions or reductions in benefits depending on their country of residence and citizenship status.
What to do if you’re worried about running out of money in retirement
If you’re concerned about potential reductions to your Social Security or simply want a more reliable income stream, there are practical strategies you can explore. Here are a few worth considering:
Buy an annuity
An annuity is a type of retirement insurance product that provides guaranteed income for the rest of your life or for a set period of time and can be used to supplement Social Security benefits.
By converting a portion of your retirement savings into an annuity, you can ensure a consistent cash flow that is unaffected by market fluctuations, inflation (if you choose a cost-of-living-adjusted annuity), or Social Security Administration rules.
Consider getting a reverse mortgage
A reverse mortgage allows homeowners aged 62 and older to access home equity to supplement retirement income without having to make monthly mortgage payments or sell their home. This is especially useful if your Social Security benefits are lower than expected, or if you want to keep your retirement savings for other purposes.
Diversify your retirement income!
Aside from annuities and reverse mortgages, it is prudent to include a variety of sources in your retirement portfolio, such as investments, high-yield savings accounts, certificates of deposit (CDs), and other assets that can be accessed in times of need. Diversification reduces reliance on a single source of income and can provide protection against unexpected Social Security cuts.
The bottom line
Social Security is an important part of most people’s retirement plans, but it is not completely immune to disruptions. Working before the full retirement age, changing your eligibility for specific benefits, or having your benefits garnished or taxed can all have an impact on your payments, either temporarily or permanently.
The good news is that most retirees who plan carefully, understand the rules, and consider alternative income strategies such as annuities, reverse mortgages, and diversified savings can help protect themselves against potential shortfalls. Being proactive is one of the best ways to ensure a steady, predictable income stream in retirement, regardless of the challenges that Social Security may present.
