Will my Social Security benefits change if I unretire?

Retirement is a common goal, but many factors will affect when exactly you decide to retire. Early retirement incentives, leadership changes or job modifications may make retiring earlier than anticipated an attractive option. You might even find yourself retired for a time—starting to collect Social Security and other benefits—but then want to work again.

Can you stop Social Security and go back to work? Indeed, you can "unretire," but there are some potential caveats related to your federal retirement benefits. If you decide to rejoin the workforce, your Social Security payments likely will change depending on how much money you're earning and your age. Let's take a look at what's involved with unretiring.

"Before going back to work, it's important to consult a financial professional," says Andrew Mortenson, Thrivent financial consultant in West Bend, Wisconsin. "You may be able to withdraw your Social Security application, or you may decide you want to continue collecting. It's also important to look at how these decisions may impact your taxes and other sources of income. Gathering more information before making your decision decreases the likelihood of financial surprises or regret down the road."

The urge to return to work might surface for several reasons. Some people miss the camaraderie and personal fulfillment of working regularly and may want to pursue it part or full time again. Others realize that achieving some of their financial goals might be easier if they had more income. Or an opportunity may arise that calls to your interests or passion that makes working more appealing than retirement.

If you find yourself contemplating a return to work, you're not alone. A 2023 survey found that one in eight retirees plan to go back to work due to inflation and high living costs. When returning to work, you'll want to know all the impacts this choice has on your Social Security benefits.

Social Security is structured to provide larger payments the later you choose to retire, and taking benefits early can potentially result in them being withheld until later if you choose to reenter the workforce. However, there are plenty of times where the modest offset of one's Social Security benefits may be well worth the combination of income and personal fulfillment that returning to work provides. Also, when benefits are withheld due to income earned, it can increase your benefit later on when you retire again.

The greatest distinction in how your return-to-work income will affect your Social Security benefits is related to whether you've reached full retirement age. Full retirement age (FRA) is 66 if you were born between 1943 and 1954, and it gradually increases to 67 if you were born in 1960 or later. If you return to work after full retirement age, you'll experience no drop in benefits no matter how much you earn.

In general, choosing to work in retirement before full retirement age may cause a temporary reduction in benefits, but you eventually will see a larger benefit when you "re-retire."

If you retire when you're younger than full retirement age but go back to work within 12 months, you can return the benefits you've received and stop receiving more, a complete do-over. You'll then just claim Social Security again when you "re-retire," likely receiving a higher benefit check at that time as a result of being older.

For income earned before full retirement age but after those first 12 months of retirement, you'll have $1 deducted from your benefits for every $2 of earnings above $23,400 in 2025. Earning less than $23,400 wouldn't affect your benefits. One caveat: In the year you turn your full retirement age, the earnings limit increases to $62,160. For every $3 above this limit, your benefits are reduced by $1.

"They do attempt to pay you back for what was withheld from the earnings limit by readjusting your benefit at FRA," says Eric Berg, Advice Service & Digital Tools consultant at Thrivent.

You will want to run the numbers based on your anticipated income and timing rather than following a general rule. For instance, if you haven't reached full retirement age and you know you're going to make $15,000 a year when you return to work, your income will have no effect on your benefits because it's under the limit of $23,400. Therefore, you'd make that decision based just on your interest in the work and earnings.

But let's change the details a bit and put the income at $30,000. At more than $5,600 over the limit, that means your benefits would be reduced by $2,800. You'd have to decide whether returning to work is still worth it considering the decrease in benefits.

"It is best avoided, if at all possible, but if you do need to return to work, it is best to notify the Social Security office. If they discover they overpaid, they will withhold checks, and in some cases come after you for the money they overpaid," says Berg.

If it ends up that going back to work would put you out of your financial comfort zone right now, remember that you can use your time in other ways, like volunteering. It's all about looking at your options.

Learn more about earning limits while working on Social Security

If you delay taking benefits until your full retirement age, you will receive your full benefit going forward. There are no more benefit reductions, and if you delay your retirement further past full retirement age, you'll see an even larger payment when you do eventually take Social Security, up to age 70. At these ages, though, there is usually no Social-Security-related downside to returning to work if some combination of the work itself and the income appeals to you.

If you have your benefits withheld due to returning to work, you're likely to have your benefits recalculated in the future, and you usually will receive more. If you pay back your benefits so far during those first 12 months, your future benefit will grow because you'll effectively re-do your retirement at an older age.

Also, the benefits you qualify to receive are tied to the 35 top-earning years of your career, so if you unretire and have a year of relatively high income, the SSA may recalculate your benefits. When you begin qualifying for benefits again—or when you reach age 70 and automatically receive benefits—you may see that your monthly benefit is higher.

Make sure that your choice to unretire takes Social Security into account but also keeps in mind any other changes that returning to work might entail.

If you return to work and are eligible for a 401(k) retirement plan, you may be able to delay the required minimum distributions from that specific employer's plan. Letting more time pass while your assets grow in retirement accounts is one way to potentially see your investments increase for the rest of your retirement.

If you qualify for a pension, you'll also want to see if your eligibility or payments are affected by going back to work.

While qualifying for Medicare Part A when you turn 65 is generally independent of whether you're taking Social Security benefits, it's wise to check with the SSA if you are considering unretiring. For example, if you are eligible for health care coverage through your work after you unretire, you may need to evaluate your Medicare and other available health care options and make a choice with as much information as possible.

You also may be considering or participating in Medicare Part B and Part D, which have premiums associated with them. If so, you should talk to a benefits administrator to avoid doubling up on payments for the same coverages available through your job.

You'll want to talk to a tax professional about how additional income post-retirement can affect your tax burden. Every situation is different, but higher income is generally taxed at higher rates. Your tax professional can help you determine any applicable deductions or credits in the event you unretire.