There are many different circumstances that can lead a person to claim Social Security benefits in the United States of America, and it is not just unemployment.
The key feature is how much money you make from whatever full-time work you have taken up. If more money is earned than the yearly earnings limit, then expect Social Security benefits to be reduced.
Once you reach the month in which you hit full retirement age, benefits will not be reduced regardless of how much money you earn.
As per the ssa.gov: “If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2025 that limit is $23,400.
In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.
If you will reach full retirement age in 2025, the limit on your earnings for the months before full retirement age is $62,160.
How are earnings decided?
There can also be confusion over what is classed as earnings and what isn’t, as people may have money tied up in property or stocks.
As ssa.gov explains: “When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net earnings if you’re self-employed. We include bonuses, commissions, and vacation pay. We don’t count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.
“As long as you continue to work, even if you are receiving benefits, you will continue to pay Social Security taxes on your earnings. However, we will check your record every year to see whether the additional earnings you had will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount.”