Will my Social Security percentage increase if I return to work full-time after taking early retirement?

This is really helpful, thanks! So basically they'll adjust my benefit even if I've already started receiving it? I was worried I'd be permanently stuck with the reduced amount from claiming at 62.

Did they actually stop your SS checks completely when you went back to work? I'm thinking about doing the same thing but don't want to lose my benefits entirely.

They didn't stop them completely, but they were reduced significantly since I'm earning above the limit. The agent explained that after FRA, they'll adjust my benefit upward to account for the months when benefits were partially or fully withheld. Just make sure you report your earnings to SSA when you return to work so they can adjust appropriately.

Your sister may have encountered an overpayment situation, which is different from the normal earnings limit withholding. If you properly report your return to work, SSA will adjust your benefits going forward rather than creating a large overpayment that needs to be repaid. Working while collecting Social Security early isn't necessarily a bad thing - it can increase your benefit long-term.

The early filing reduction and the potential benefit increase from additional work are two separate calculations. The reduction for filing at 62 is permanent - approximately 30% less than your full retirement age benefit. However, working longer can increase your Primary Insurance Amount (PIA) if those earnings replace lower years in your 35-year calculation. The earnings test withholding also results in a recalculation at FRA that effectively removes the reduction for any months where your benefit was completely withheld. So while working won't completely eliminate the early filing reduction, it can significantly improve your benefit amount through these other mechanisms.

Thank you! That makes more sense now. So basically even with the early filing reduction, my benefit could still go up if I earn enough to improve my overall calculation. I appreciate the clear explanation.

Thanks for sharing your experience. Can I ask roughly how much you were earning when you went back to work? I'm trying to figure out if it would be worth it in my situation.

was making about 65k when i went back. not great money but decent. the bigger benefit was just keeping busy and having health insurance thru work honestly

Yes, that's correct. SSA calculates your benefit based on your highest 35 years of earnings (indexed for inflation). If you return to work and earn more than in some of your previous 35 highest years, these new years will replace lower-earning years in the calculation. This can increase your Primary Insurance Amount, which is the basis for your benefit calculation. SSA automatically recalculates this annually if you continue working after claiming benefits.

Good point about taxes. If your combined income (adjusted gross income + nontaxable interest + half of your Social Security benefits) exceeds certain thresholds, up to 85% of your benefits may become taxable. For 2025, those thresholds are approximately $25,000 for individuals and $32,000 for married filing jointly. Working while collecting benefits will likely increase your overall income and could result in more of your benefits being subject to taxation. This is separate from the earnings test withholding we discussed earlier.

Yes, exactly. When you reach Full Retirement Age, Social Security recalculates your benefit to give you credit for months when your benefits were completely withheld due to the earnings test. This is done by adjusting the reduction factor that was applied when you claimed early. For example, if you claimed 48 months early (at 62) but had benefits completely withheld for 12 of those months, at FRA they would recalculate your benefit as if you had only claimed 36 months early, which results in a higher monthly amount going forward.

Starting Social Security benefits early doesn't automatically enroll you in Medicare - these are separate enrollment processes. Medicare eligibility begins at 65 regardless of when you claim Social Security benefits. If you return to work with employer health coverage after starting Social Security, you can indeed delay Medicare Part B enrollment without penalty as long as your employer has 20+ employees and provides creditable coverage. You'll need to get a form from your employer confirming this coverage when you eventually do enroll in Medicare. This is called a Special Enrollment Period exception to avoid the Part B late enrollment penalty.

This is incredibly helpful - I had no idea about the option to suspend benefits and earn delayed retirement credits! So if I understand correctly, I could take early retirement at 62, work part-time for a couple years, then if I decide to go back to full-time work I could actually suspend my benefits and let them grow at 8% per year until 70? That sounds like it could potentially make up for a lot of the early filing reduction. Do you know if there are any restrictions on when you can suspend benefits or how long you have to keep them suspended?

You can request to suspend your benefits any time after you reach Full Retirement Age (FRA) - so in your case, that would be at 66 or 67 depending on your birth year. You don't have to keep them suspended for any minimum period - you can restart them at any time up until age 70, or they'll automatically restart at 70. The 8% delayed retirement credits are prorated monthly, so you get 2/3 of 1% for each month you delay. Just keep in mind that if you suspend benefits, you'll also lose any auxiliary benefits (like spousal benefits) that might be payable on your record. It's definitely worth running the numbers to see if the delayed credits would be worth more than continuing to receive the reduced benefits, especially if you're working full-time and might hit the earnings limit anyway.

That's a really smart way to think about it! The career field definitely matters a lot. I'm also in tech and went through a similar calculation when I was considering this path. What I found is that if your recent years are significantly higher than your early career years (which is common in tech), even just 3-4 years of good earnings can make a meaningful difference. The PIA increase depends on how much those new high years replace your lowest years in the top 35. I used the SSA's online calculator to run different scenarios - you can plug in hypothetical future earnings to see how it would affect your benefit. One thing to consider with remote work is that you might actually have more flexibility to optimize your earnings timing around the annual earnings limit, since you could potentially control project timing or consulting income more easily than with a traditional W-2 role.

This is such a valuable perspective, thank you! The psychological security aspect is something I hadn't fully considered but makes total sense. Having that guaranteed baseline income would definitely change the whole dynamic of job searching and negotiating. I'm curious about the healthcare piece you mentioned - for someone who takes early retirement at 62, works for a few years with employer coverage, then retires again before 65, what happens during that gap before Medicare kicks in? Would you be back to buying individual coverage on the marketplace, or are there other options like COBRA? The healthcare costs during those transition periods could definitely impact whether this strategy makes financial sense overall.