US Social Security Claim Mistakes and Work Earnings Limits

Turning 62 makes Americans eligible for Social Security retirement benefits, but experts say the biggest error retirees make is claiming without first doing a break‑even analysis. Delaying benefits past age 62 can increase monthly payments by avoiding early‑filing penalties and earning delayed retirement credits; a break‑even calculation shows how long one must live to recoup the missed months.

For those who continue working after claiming, the 2026 earnings test reduces benefits if income exceeds set thresholds. Below full retirement age (FRA) the annual limit is $24,480, with a $2,040 monthly cap; exceeding the limit cuts the benefit dollar‑for‑dollar (or $2 for every $1 earned over). At FRA the annual limit rises to $65,160 and the monthly cap to $5,430, with reductions of $1 for every $3 earned over. Benefits withheld due to excess earnings are gradually repaid once the retiree reaches FRA, though full recovery is not guaranteed.