According to a report from the Center for Retirement Research at Boston College, nearly two in five Social Security beneficiaries are now combining work and benefits, a trend that’s becoming increasingly common. This growing phenomenon is not just about finances; it also reflects changing social attitudes toward ageing and career transitions. For many, working during retirement is not just a necessity but also a fulfilling option that provides a sense of purpose and structure.
The Rise of the ‘Slow Fade’ into Retirement
The idea of a clean break from work at 65 is slowly becoming obsolete. According to Siyan Liu, a co-author of the Boston College report, most people who claim Social Security benefits and continue working fall into two distinct groups. More than two-thirds are individuals with lower earnings who claim Social Security benefits early, often working part-time to supplement their income.
The remaining third are higher earners who claim benefits around their full retirement age (FRA) and continue working full-time. These individuals tend to delay full retirement to maximise their benefits, with some waiting until 70 to take advantage of delayed retirement credits.
This shift reflects broader demographic and economic trends, particularly the rise in life expectancy and the increased cost of living. As the workforce ages, Social Security has become a key financial tool that allows people to phase into retirement gradually. Older workers, especially those in higher-income brackets, are choosing to delay retirement for financial reasons or personal fulfilment. According to Liu, the concept of retirement has become less of a “finish line” and more of a “slow fade,” where individuals opt to remain engaged in the workforce while still receiving Social Security benefits.
Financial Implications of Working While Claiming Social Security
The interaction between work and Social Security benefits can have important financial implications. Individuals can begin claiming Social Security as early as 62, but their benefits will be reduced by up to 30% if they do so before reaching FRA, which for those born in 1960 or later is 67. For people who choose to delay benefits past FRA, they can earn delayed retirement credits, increasing their monthly payments by roughly 8% per year until age 70.
For those who choose to work while receiving benefits, the Social Security Administration (SSA) imposes earnings limits. If an individual earns above a certain threshold, approximately $23,000 before reaching FRA, the SSA temporarily withholds some of their benefits. Once the individual reaches FRA, the earnings limit no longer applies, and any previously withheld benefits are adjusted and added to their monthly payments.
Sharon Smith, a business consultant who claimed Social Security at 67, illustrates how this system works. Smith continues to build her coaching business while drawing her Social Security payments. The additional income from her Social Security cheque provides her with financial stability as she transitions to a new career, allowing her to work on her terms without feeling pressured to take on just any job.
Work and Purpose in Later Life
While financial necessity plays a role in this trend, many older workers also continue working because they want to. According to a report from the Pew Research Center, the majority of older workers report that they work both because they need the money and because they enjoy their careers. This is particularly true for those in higher income brackets, who have the luxury of choosing work that is meaningful and personally fulfilling, rather than simply a financial obligation.
The increasing number of older workers also points to a shift in attitudes towards retirement. Many people in their 60s and 70s no longer view retirement as the definitive end of their working lives. Instead, they see it as a more gradual transition, where they can continue contributing to the workforce while also enjoying the benefits of their Social Security income.
The growing trend of working during retirement is reshaping the traditional retirement model in the United States. Rather than a sharp break, retirement is becoming a flexible phase in life that allows individuals to balance financial stability, personal fulfilment, and continued engagement in the workforce.
