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Ways You Can Lose Your Social Security Benefits

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Social Security serves mostly older retirees, but also the disabled through Social Security Disability Insurance (SSDI). The Supplemental Security Income (SSI) program gives extra help to the most vulnerable people, those who are disabled or blind and have limited resources. Together, the Social Security Administration (SSA) paid $1 trillion to 65 million monthly beneficiaries in 2021.

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If you collect benefits or plan to in the near future, it’s important to understand how the things you do or don’t do can shrink your slice of that pie. Keep reading to learn about how you could lose some or all of your Social Security benefits.

You Forfeit up to 30% of Your Benefits by Claiming Early

The full retirement age is 67, but if you claim at 66 and 11 months, you’ll receive only 99.4% of your full payment. If you claim at 65, you’ll receive just 86.7% of your benefits. You can claim as young as 62, but if you do, you’ll receive only 70% of your full payment — for life, if you don’t withdraw your claim within a year.

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You’ll Get Less if You Claim Early and Earn Too Much Money

Once you reach full retirement age, there is no income test for receiving full benefits. But if you claim early and continue to earn income, your Social Security check will shrink if you make too much money. For 2022, you can earn up to $19,560 without seeing your benefits reduced. After that, the SSA will withhold $1 for every $2 you earn above the threshold. If you’ll reach full retirement age later in the year, you can earn up to $51,960. After that, the SSA withholds $1 for every $3 earned.

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The SSA Suspends Payments if You Go to Jail or Prison

If you’re incarcerated for more than 30 days as a sentence for a criminal conviction, the SSA will suspend your Social Security benefits. Although it won’t happen automatically, the SSA can resume payments the month following your release. Although the incarcerated person can’t receive benefits, spouses and dependents will continue to collect payments as long as they remain eligible.

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You Can Lose Some of Your Benefits to Taxes

If you earn more than $25,000 as a single filer or $32,000 as a joint filer, up to 85% of your Social Security benefits are fair game to the IRS. Twelve states also tax Social Security benefits as income.

You Can Lose SSDI in a Few Different Ways

Most people who collect SSDI will receive benefits indefinitely, but some life events can cause the SSA to terminate payments. If you receive disability benefits, you could stop receiving payments for reasons like: 

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