Whether you've only been on the job for a few years or you've been working and paying into Social Security for decades, you likely feel that money is yours (and it is). However, you may not be aware that it's possible to lose your benefits for a period of time, if not permanently. Here are five ways that can happen.
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1. Owing federal debts
Although federal law protects Social Security from private creditors, like medical providers, loan companies, and credit card companies, some government agencies can seize a portion of benefits. For example:
- Child support and alimony: If you're behind on court-ordered child support or alimony payments, Uncle Sam can garnish your benefits by up to 15% until the debt is paid.
- Federal taxes: If you've failed to pay federal taxes, the IRS can levy as much as 15% of your monthly benefit.
- Defaulted federal student loans: If you took out federal student loans and got behind in payments, the government can garnish as much as 15% of your Social Security benefits to cover the arrearage.
If you have any questions about a levy, call the U.S. Department of Treasury at 1-(800)-304-3107 or visit the Treasury website.
2. Working while receiving benefits
For Americans born after 1960, full retirement age (FRA) is 67, although it's possible to apply for benefits as early as age 62. If you opt to receive Social Security benefits before FRA, your checks could be temporarily reduced. Here's how it works:
- In 2025, you can earn as much as $22,560 annually before benefits are affected.
- If you earn more than $22,560, the Social Security Administration (SSA) withholds $1 in benefits for every $2 earned. For example, earning $30,000 puts you $7,440 over the threshold, and the SSA will withhold $3,720 in benefits.
- In the year you're set to reach FRA, the reduction becomes $1 for every $3 over the threshold.
- The earnings threshold is lifted entirely the month you reach FRA, and you can earn as much as you would like without affecting your Social Security benefits.
The good news is this: It's not a permanent loss. Once you reach FRA, the SSA recalculates your benefits and gives you credit for those months when payments were withheld. That means that, over time, you will recoup the money the SSA withheld.
3. Your marital status changes
If you're a surviving spouse or a divorced surviving spouse, a strong financial plan depends upon understanding what happens if you remarry. If you're receiving benefits based on a spouse's work record, it's possible to lose those benefits if:
- You remarry before age 50: You won't be eligible for survivors or disability benefits as a surviving spouse unless the later marriage ends in annulment or divorce.
- You remarry between 50 and 59: You may be eligible for benefits as a disabled surviving spouse or surviving divorced spouse if you could not work due to disability when you remarried after 50. If you remarry before 60 and the new marriage ends, you can receive benefits based on your deceased spouse's work record.
- You remarry after age 60: You may be eligible for survivors' benefits on your deceased spouse's record or your new spouse's work record. The SSA will help you figure out which will give you the most significant benefit.
If you're collecting Social Security benefits paid on a former spouse's work record, those benefits will stop when you remarry. A new marriage should be reported to the SSA to avoid overpayment.
4. You're incarcerated
According to the SSA, if you receive Social Security benefits and are convicted of a criminal offense leading to a jail or prison stay of 30 continuous days or more, the SSA will suspend benefits until the month after your release.
Although you cannot receive Social Security benefits while incarcerated, benefits paid to your spouse or children will continue as long as they're eligible.
5. You're a Social Security-eligible noncitizen living outside the U.S. for six months
If a noncitizen who has qualified for Social Security leaves the U.S. for six calendar months in a row, their Social Security benefits will stop. SSA will not restart payments until the individual returns to the U.S. and remains for a full calendar month. While it's true that some undocumented workers obtain fake Social Security numbers or used lapsed numbers to get a job, they pay billions into the Social Security system through FICA payroll taxes, but rarely receive benefits. The following applies only to those who are eligible for Social Security.
A noncitizen living in the U.S. may be eligible for Social Security only if they:
- Are a permanent legal resident.
- Have a visa that lets them work in the U.S.
- Were permitted in the U.S. under the Family Unity or Immediate Relative provisions of immigration law.
Noncitizens who now live abroad but have worked in the U.S. and accrued sufficient Social Security credits, or noncitizens married to Americans living abroad and who meet the criteria for spousal or survivor benefits, might be eligible for payments only if they:
- Are a citizen or resident of a country with which the U.S. has a Social Security agreement.
- Lived in the U.S. for a minimum of five years with an American spouse.
- Were married to someone who died during U.S. military service.
Social Security rules regarding noncitizens can be especially complicated, so contact the SSA with any questions you may have.
In many cases, when the SSA withholds payments, it's a temporary situation. Even if there's little chance it will ever happen to you, knowing which actions trigger SSA scrutiny can help you design a stronger retirement strategy.
