Toys ‘R’ Us Is Opening 120 Holiday Stores. He Retires at 62 and Takes a Seasonal Job, Only to Find His Social Security Checks at Risk
A seasonal job at a holiday store sounds like easy extra cash for a new retiree, but one extra week of shifts can quietly trigger a consequence that wipes out an entire month of Social Security benefits.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Toys “R” Us is opening 120 standalone stores across the U.S. this holiday season, bringing its total to 160. The expansion creates a lot of register shifts and stockroom hours, and plenty of them will go to recent retirees looking for a little gift money.
Consider Mike, a hypothetical 62-year-old retiree. He left his full-time job at the end of June after earning $40,000 for the year and started Social Security in July at 62. His standard benefit would have been $2,500, but claiming early cuts it by 30%, leaving him $1,750 a month. A holiday job sounds harmless until a coworker mentions that Social Security might take some of it back.
Mike isn’t alone in worrying about this. Many early retirees limit their hours because they’re afraid earning more will eat into their Social Security checks.
Every Paycheck You Earn Counts Toward the $24,480 Limit
Until reaching 67, the age that applies to most people approaching it now, Social Security deducts $1 for every $2 you earn above an annual limit. For 2026, that limit is $24,480.
The limit covers wages from all your jobs combined, so a seasonal paycheck gets stacked on top of whatever else you earn, as with a retiree in a normal year who has a $22,000 part-time bookkeeping job and adds $5,000 from a holiday store. The total is $27,000, which puts him over the line, and $1,260 in benefits gets withheld. Each job by itself would have stayed under the limit.
A $2,040 Monthly Test Can Save Mike’s First Year
On paper, Mike has a problem. The $40,000 from his old job was already well past $24,480 before his first check arrived. There is a special rule for exactly this situation, and it applies only during the first year of retirement.
Under that rule, Social Security pays a full monthly check. It covers any whole month in which you earn $2,040 or less in wages and don’t perform substantial services in self-employment. That means working more than 45 hours a month in your own business, or 15 to 45 hours in a highly skilled one.
If Mike earns $1,900 a month in November and December, he keeps every check, even though his total for the year reaches $43,800.
If extra holiday shifts push his December wages to $2,600, that month no longer qualifies for the special exception. With his annual earnings already well above the limit, Social Security would withhold his $1,750 benefit for December. One extra week at the store could cost him a full month’s check.
This protection generally lasts only one year. Starting in 2027, Mike will be subject to the annual earnings limit of $25,560, so next year’s holiday wages will count alongside everything else he earns that year.
Withheld Checks Come Back Slowly as a Higher Benefit
Withheld benefits aren’t necessarily lost forever. When Mike reaches full retirement age at 67, Social Security recalculates his check to credit the months it withheld. That makes his early-claiming cut a little smaller and raises his monthly benefit going forward.
For Mike, getting credit for one withheld month would raise his benefit by roughly $10 a month starting at 67, before inflation adjustments. At that rate, it would take about 14 years to make up the $1,750 check, putting his break-even point around age 81. Living longer works in his favor, but the extra holiday income comes with a real trade-off.
Run the Numbers Before Saying Yes to Extra Shifts
Before taking a shift, multiply your hourly rate by the hours you’re likely to work each month, and include overtime, since retailers often add hours in December. In your first year of retirement, the number that matters is the monthly figure. In any year after that, add up all your wages for the year and compare the total to the annual limit.
Then let Social Security know about the change in your earnings before you start working. Updating your estimate early lets the agency adjust your checks along the way. Otherwise it may discover the extra earnings later and ask you to pay back benefits it has already sent.
Small details can change the result a lot here. Whether you earn those wages in November or December, or take on side work as a contractor instead of an employee, can affect how Social Security counts the money. Check your work dates and expected earnings before signing on.
Contact [email protected] for any questions or corrections.