Social Security Benefits Can Be Lost in These 10 Ways

Social Security serves as a financial safety net for millions of Americans, providing essential income through retirement, disability, and survivor programs. However, here’s something that might catch you off guard: those benefits aren’t as permanent as your favorite pair of worn-out slippers. While Social Security provides crucial support, certain circumstances can shrink your payments faster than a wool sweater in hot water.

Let’s examine the three main Social Security programs you might encounter:

• Old-Age/Retirement Social Security (OA) – Your classic retirement benefits that hopefully arrive before you need a walker
• Survivors Social Security (S) – Benefits for widows, widowers, and dependents who didn’t see this coming
• Social Security Disability Insurance (DI) – Support for those who discovered their bodies have warranty expiration dates

You’ve probably spotted “OASDI” on your paystubs if you’ve ever been a W-2 employee. That’s where these acronyms come together like an awkward family reunion.

Now, can Social Security actually vanish? The short answer is absolutely. Even if you’re already receiving benefits, certain situations can make your payments disappear quicker than free donuts at a police station. Sometimes this happens automatically due to life changes. Other times, it’s the result of decisions you make that seemed brilliant at 2 AM.

Understanding these potential pitfalls can help you make informed choices about your benefits. Therefore, let’s explore the ten most common ways you could lose part or all of your Social Security benefits.

How Your Retirement Benefits Can Disappear

1. Claiming Social Security Benefits Too Early

Think of Social Security retirement benefits like a good joke. The timing makes all the difference, but you can certainly tell it too early if you’re desperate for a laugh.

Your full retirement age based on birth year depends on when you were born:

• Born 1943-1954: Age 66
• Born 1955: 66 and 2 months
• Born 1956: 66 and 4 months
• Born 1957: 66 and 6 months
• Born 1958: 66 and 8 months
• Born 1959: 66 and 10 months
• Born 1960 or later: Age 67

Here’s the punchline: you can start collecting benefits up to five years before your full retirement age. However, you’ll pay a price steeper than concert tickets. Your retirement benefits get reduced by 5/9ths of 1% for each month you claim early, up to 36 months. If you go even earlier than that, the reduction jumps to 5/12ths of 1% per month.

Let’s say you were born in 1960 with a full retirement age of 67. If you decide to claim at 62, you’d face the maximum reduction of about 30%. That’s like ordering a large pizza and getting a personal pan instead, for the rest of your life.

On the bright side, if you wait past your full retirement age, you’ll earn delayed retirement credits worth 8% per year until age 70. It’s like getting a bonus for having the patience of a saint.

2. Earning Too Much Before Full Retirement Age

Here’s where things get as complicated as assembling furniture without instructions. If you’re already at full retirement age, you can work and collect your full Social Security benefits without any penalties. But if you claim benefits early and keep working, you’ll encounter what’s called the “Earning Too Much Before Full Retirement Age.”

For 2024, here’s how this delightful system works:

• Under full retirement age all year: Social Security withholds $1 for every $2 you earn over $22,320
• Reaching full retirement age during 2024: They withhold $1 for every $3 you earn over $59,520

For official details on the Social Security earnings test for 2024, visit the Social Security Administration’s website.

Don’t panic if you’re planning to retire mid-year, though. There’s a special rule that can save you from this mathematical nightmare. As long as your monthly earnings after retirement stay under $1,860 in 2024, you’ll get full Social Security checks for the remaining months of that year. This applies regardless of how much you earned earlier while channeling your inner workaholic.

The good news? This isn’t money lost forever, unlike that $20 you lent your cousin. Once you reach full retirement age, Social Security recalculates your benefits upward to account for the months they withheld payments. For more on how benefits are adjusted after reaching full retirement age, see this helpful resource. Think of it as an involuntary savings account that actually pays you back later.

When Social Security Survivor Benefits Vanish

Survivor benefits help families cope with the loss of a breadwinner. Unfortunately, they come with their own set of eligibility requirements that can make benefits disappear faster than your motivation on Monday morning.

3. Remarrying Before Age 60 (or 50 with a Disability)

Love might be in the air, but timing matters more than a perfectly executed punchline when it comes to survivor benefits. If you remarry before age 60, or age 50 if you have a disability, you’ll lose your Social Security survivor benefits while you’re married. It’s like the government’s way of saying congratulations on finding love, now pay for it.

However, remarrying after age 60 won’t affect your eligibility at all. This rule applies whether you’re a surviving spouse or a surviving divorced spouse. Although divorced spouses need to have been married for at least 10 years to qualify, because apparently the government has opinions about relationship duration.

We’re not suggesting you should avoid love for the sake of Social Security. There are many financial and personal benefits to marriage that could outweigh the loss of survivor benefits. Just be aware of the trade-off before you say “I do” again.

4. Your Child Reaches Age 16

If you’re under 60 with no disability but caring for your deceased spouse’s child, your survivor benefits have an expiration date more predictable than milk. Once that child turns 16, assuming they don’t have a disability, your benefits stop faster than a teenager’s attention span.

The silver lining? This is only temporary, like most teenage phases. You’ll become eligible again once you reach age 60, or 50 with a disability.

5. Children Age Out of the System

Kids can receive survivor benefits, but these don’t last forever, much like their willingness to clean their rooms. Benefits typically end when a child turns 18, with two important exceptions:

1. Still in school: Benefits continue until age 19, or up to 19 years and 2 months in certain situations, if they’re still working on elementary or secondary education
2. Disability before age 22: If a child develops a disability before turning 22, benefits can continue for life

How Social Security Disability Benefits Can Disappear

Social Security Disability Insurance helps people who can’t work due to a qualifying disability. However, several situations can cause these benefits to end faster than a bad first date.

6. Earning Too Much While on Disability

What happens if your health improves and you want to try working again? Social Security has a system for this called the “trial work period.” It sounds friendlier than it actually is.

During your trial work period, you’ll receive full disability insurance benefits while testing your ability to work. Any month you earn over $1,110 in 2024 counts as one trial month. The trial period ends after you’ve had nine such months within a rolling five-year period.

After the trial period comes the “extended period of eligibility.” This lasts 36 months where you can still receive benefits as long as your monthly earnings don’t exceed $1,550 in 2024, or $2,590 if you’re blind. Earn more than that in any given month, and you won’t get a disability payment for that month.

If you consistently earn above these limits after the extended period ends, you’ll typically lose your benefits entirely. But there’s a safety net: if you need to restart benefits within five years, you can request expedited reinstatement without filing a new application. It’s like having a reset button, but with more paperwork.

7. Your Health Improves

Some disabilities are temporary, so Social Security periodically reviews cases to ensure people still qualify. The frequency depends on your prognosis:

• Likely to improve: Review in 6-18 months
• Possible improvement: Review every 3 years
• Unlikely to improve: Review every 7 years

You’re responsible for notifying Social Security if your health improves or you start working again. Don’t wait for them to discover changes on their own, because they will, and they have the investigative skills of a determined mother-in-law.

8. Reaching Full Retirement Age

You can’t collect both disability and retirement benefits simultaneously, because apparently the government doesn’t believe in double-dipping. When you reach full retirement age, your disability benefits automatically convert to retirement benefits. Don’t worry, though. The payment amount stays the same, like a costume change that doesn’t affect the performance.

9. Getting Incarcerated

Social Security Disability Insurance stops while you’re imprisoned for committing a crime. This makes sense, considering room and board are provided elsewhere. After release, you’re not automatically eligible again, but you can request reinstatement by providing release documents.

If your facility has a prerelease agreement with Social Security, they’ll help determine your eligibility. Otherwise, you’ll need to contact Social Security directly, ideally several months before your expected release.

10. Qualifying for Higher Benefits

Here’s the one “loss” that’s actually good news, like finding out your dentist appointment was cancelled. You can’t receive multiple types of Social Security benefits simultaneously. If you qualify for more than one type, you’ll receive whichever provides the higher payment.

For example, if your retirement benefits would be larger than your survivor benefits, you’ll automatically receive the retirement benefits instead. It’s not really losing benefits. Rather, it’s getting upgraded to the premium package.

Protecting Yourself from Social Security Scams

While there are legitimate ways to lose Social Security benefits, don’t fall for scammers who prey on these fears like vultures at a roadside buffet. Social Security scams are among the most common schemes targeting older adults.

Real Social Security representatives almost always contact you by mail first. You’ll typically only receive phone calls if you have ongoing business with them or specifically requested a call. If someone calls claiming your benefits are at risk and demanding immediate action or personal information, it’s likely a scam with more red flags than a communist parade.

When in doubt, hang up and call Social Security directly at their official number to verify any claims about your account.

The Bottom Line on Social Security Benefits

Social Security benefits can indeed be reduced or eliminated under certain circumstances. However, most of these situations are either temporary or the result of positive life changes. Understanding these rules helps you make informed decisions about when to claim benefits and how to protect what you’ve earned.

The key is staying informed about the rules and planning accordingly. Whether you’re approaching retirement, dealing with a disability, or helping a family member navigate survivor benefits, knowing these potential pitfalls can help you maximize your Social Security benefits over the long term.

Remember, Social Security is designed to be a safety net, not a trap with more rules than a homeowners association. While the rules might seem complex, they’re generally structured to provide the most benefit possible while preventing abuse of the system. By understanding how the system works, you can make choices that serve your best interests while staying within the guidelines.