When it comes to the intricacies of Social Security, it pays to think about timing. A big reason experts advise waiting until at least full retirement age to claim Social Security benefits: You get to skip the Social Security benefits earnings test, which hits early claimers who are still working. But there are actually two earnings tests — an annual test and a monthly test — and the second one can help early retirees leaving work midyear to avoid the trap.
Older workers are taking increasingly varied paths out of the workforce. Many such workers are more likely to partially retire or move in and out of the labor force before permanently leaving the workforce, according to the 2023 SSA report, Retirement Trajectories and Social Security’s Retirement Earnings Test. That's why it is important for older workers and their families to understand the implications of the retirement earnings test for their work and retirement decisions.
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