3 ways you can lose your Social Security benefits

The average monthly Social Security benefit for retired workers is just under $2,000 currently, and tens of millions of Americans rely on these hard-earned benefits for at least part of their retirement income. But while retirees should try and avoid being reliant on Social Security benefits alone — especially now that there are questions regarding the long-term sustainability of the program — the reality is that for many people, these monthly checks are the largest source of cash they'll have once they stop working. 

As a result, it's important to try and protect your Social Security benefits from being lost or reduced. That isn't always as easy as it should be, though. While many people assume their benefits will continue uninterrupted, the reality is that even small changes in your personal circumstances can have ripple effects on the Social Security checks you receive during retirement. And, understanding the potential challenges that you could face is important if you want to plan a retirement that's not just comfortable, but resilient.

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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 reaching your full retirement age and continue to work, your benefits can be temporarily reduced if your earnings exceed the Social Security Administration's annual limit. For 2025, anyone under full retirement age can earn up to $22,560 per year before benefits are affected.

The reduction you could face is equivalent to $1 in benefits for every $2 earned over the limit. In the year you reach full retirement age, the threshold rises to $59,520, and the reduction becomes $1 for every $3 over the limit, but only until the month you reach that age. After full retirement age, there are no earnings limits, so your benefits are safe regardless of how much you make.

Note, though, that this isn't a permanent loss, since the Social Security Administration recalculates your benefits to give you credit for months when payments were withheld, meaning your lifetime benefits may not actually decrease. Still, it's important to plan your retirement and working schedule carefully to avoid surprises.

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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 unique type of retirement insurance product that provides guaranteed income for life or a set period, which can be used to help fill in the gaps left by your Social Security benefits. By converting part of your retirement savings into an annuity, you create a predictable cash flow that isn't affected by market fluctuations, inflation (if you choose a cost-of-living-adjusted annuity) or Social Security Administration rules.

Consider a reverse mortgage

For homeowners aged 62 or older, a reverse mortgage allows you to tap into home equity to supplement retirement income without making monthly mortgage payments or having to sell your home. This can be particularly useful if your Social Security benefits are lower than expected or if you want to preserve your retirement savings for other needs.

Diversify your retirement income

Beyond annuities and reverse mortgages, it's smart to include a mix of sources in your retirement portfolio, like investments, high-yield savings accounts and certificates of deposit (CDs) or other assets that can be drawn on in times of need. Diversification reduces reliance on a single income source and can provide peace of mind against any unexpected reductions in Social Security.

The bottom line

Social Security is a critical part of most people's retirement plans, but it isn't entirely immune to interruption. Working before full retirement age, changes in eligibility for specific benefits or having your benefits garnished or taxed can temporarily or permanently affect your payments. 

The good news is, though, that most retirees who plan carefully, understand the rules and explore additional income strategies like annuities, reverse mortgages and diversified savings can help protect themselves against potential shortfalls. Being proactive is one of the best ways to ensure a secure, predictable income stream throughout retirement, regardless of any challenges Social Security may present.