7 Common Income Mistakes That Could Cut Your Social Security Check
If, like many, Social Security is a big part of your retirement plan, the way you earn and report income can change how much of your benefit check actually gets to your bank account. Some income counts toward limits that can shrink your monthly benefit before full retirement age. Other income can raise your taxes or Medicare premiums, which are often taken right out of your check.
There are a few rules that are easy to miss, especially in your first year of retirement. These seven common missteps are easy to avoid once you understand them, so you can keep more of the money you’ve earned over the decades.
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Earning too much before full retirement age
Claiming before your full retirement age (FRA) and still working triggers the earnings test and withholding. In this scenario, you’ll find the Social Security Administration (SSA) withholds $1 for every $2 you earn above $23,400 in 2025.
So, if, for example, you already started claiming at 63 but earn $30,000 this year, you’re $6,600 above the threshold, meaning the SSA will withhold $3,300 from your benefits. They usually stop your checks until the withheld amount is reached.
Now, it’s true that you’ll get a bump in your payments at FRA to credit back the withheld months, but in the near term, this withholding can sting if you’re not expecting it. If you plan to claim and work, you may want to make sure you earn below the threshold, or at least plan for the withholding in your budget.
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Ignoring the higher-earning limit the year you reach FRA
There’s a more generous rule the year you reach your full retirement age. In 2025, SSA only withholds $1 for every $3 you earn above $62,160, and only counts earnings before the month you hit FRA. If you reach FRA in November 2025 and earn $70,000 by the end of October, then, you’re $7,840 over the limit, so $2,613 is withheld.
To maximize earnings and minimize withholding, shifting income into or after you reach FRA can reduce or eliminate withholding entirely, because the earnings test ends the month you hit your full retirement age.
Skipping the “monthly rule” in your first retirement year
In your first year of retirement, a special monthly rule can save your check. If you retire mid-year and you’re under full retirement age, Social Security can pay you for any whole month your work pay stays under the monthly limit, even if your yearly earnings are over the annual limit.
In 2025, that monthly limit is $1,950 if you’re under FRA all year. In the year you reach FRA, it’s $5,180 for the months before you hit FRA. Let’s say you stop full-time work in June but earn $1,200 each month from July to December. Those months are under the earnings limit, so SSA can still pay those full-month checks in spite of your earlier, higher earnings.
Be sure to tell SSA it’s your first year retired so they apply this rule. And plan your retirement so that post-retirement months stay under the monthly limit.
Counting the wrong income for the earnings test
Wages and net self-employment count for the earnings test. Bonuses, commissions, and vacation pay also count. But pensions, 401(k) and Roth IRA withdrawals, annuities, investment income, interest, and VA benefits do not. Yes, a $10,000 IRA withdrawal may affect your taxes or Medicare premiums, but it won’t impact your Social Security benefit.
However, a year-end bonus can push you over the limit and trigger withholding. So make sure you separate earned income from everything else when planning your retirement and calculating benefit impact.
Not planning around spousal benefits and work
A spousal benefit can be up to 50% of the worker’s full benefit, but claiming it before your full retirement age permanently reduces that amount. If you work while getting a spousal benefit before FRA and exceed the earnings limit, the earnings test can withhold your spousal checks too.
So, if your spouse’s full benefit is $2,000 and the spousal benefit at FRA is $1,000, and you claim early, your benefit amount may reduce to $650 to $750, depending on your full retirement age. Plus, if you’re still working, SSA could temporarily withhold more.
If you’re married, make sure you coordinate claiming ages and any part-time work, and consider waiting until FRA for spousal benefits to avoid reductions and withholding if health and circumstances allow.
Ignoring taxes on your Social Security
Your benefits can be taxable based on your combined income, which is half of your Social Security plus all other income, including tax-exempt interest.
For single filers, if your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxable. For joint filers, that range is $32,000 to $44,000.
If your combined income exceeds $34,000 as a single filer, or $44,000 as a joint filer, up to 85% of your benefits can be taxable.
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Taking withdrawals at the wrong time and triggering Medicare surcharges
Large IRA withdrawals or Roth conversions can raise your modified adjusted gross income (MAGI) and trigger the income-related monthly adjustment amount (IRMAA), which is an income-related surcharge added to Medicare Parts B and D premiums.
These are often deducted from your Social Security check. In 2025, a single filer who crosses $106,000 of 2023 MAGI moves from the standard $185 Part B premium to $259, plus a $13.70 Part D surcharge. This potentially reduces your monthly benefit by around $87.70.
To avoid this, spread your withdrawals more if you can, and watch that you don’t cross the allowed thresholds. And, if you were to suffer a life-changing event that caused your income to fall, you could ask the SSA to lower or remove IRMAA by filing Form SSA-44.
Bottom line
Your Social Security check can shrink if you claim and work before full retirement age and cross the earnings limit, or if you claim a spousal benefit too early. Only wages and net self-employment count for the earnings test, but taxes and Medicare rules can also reduce what you get to keep.
To maximize your retirement benefits, you need to know which income counts, watch the yearly limits, and time your claiming and work so they don’t clash.
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