7 Ways You Can Lose Your Social Security Benefit

Millions of Americans depend on Social Security to survive. But every year, thousands of people lose their benefits without warning.

It all starts when a letter arrives in the mail: "Your payments have stopped."

Maybe you worked too many hours.

Maybe you forgot to report something.

Maybe you didn't know the rules had changed.

The worst part? Many of these reasons are completely preventable.

You just need to know the rules.

Here are seven of the most common reasons seniors lose their Social Security benefits each year:

Reason #1: Social Security Credits

One of the biggest misconceptions about Social Security is that it's an automatic benefit for older Americans. The truth is, you don’t just get Social Security; you have to earn it.

The entire system is built on a foundation of what the government calls "credits."

How Credits Work:

Think of credits as the building blocks of your retirement benefits. To qualify for Social Security, you need to accumulate 40 credits over your working life.

Here’s a quick breakdown:

• Timeframe: For most people, earning 40 credits takes about 10 years of work.

• Minimum Earnings: You have to earn a certain amount of money each year to get credits. For 2025, you must earn $1,810 to receive just one credit.

• Annual Limit: You can earn a maximum of four credits per year.

If you work for 10 years but consistently earn less than the minimum required for four credits each year, you could arrive at retirement age and find you don’t have the 40 credits you need.

How Business Owners Earn Credits:

This is where things get particularly dangerous, especially for entrepreneurs, freelancers, and small business owners.

When you run your own business, you might be tempted to minimize your tax burden by paying yourself through "profit distributions" or "owner's draws" instead of a formal salary.

Here’s the problem: Those distributions don't count toward Social Security credits.

From a tax perspective, it seems smart. But from a retirement perspective, it can be a catastrophe. Social Security credits are only earned on income subject to Social Security taxes (FICA).

I’ve seen countless comments online from people who realized this far too late. They spent years building a successful business only to find their tax-saving strategy had completely erased their Social Security retirement plan.

"Under the Table" Work:

A similar pitfall affects anyone who gets paid in cash and doesn't report it. I read a story about a man who worked for years getting paid in cash. To save money, he never reported these earnings on his taxes.

When he was finally ready to retire, he applied for benefits and was shocked to learn he didn't qualify. His official earnings record showed little to no income, meaning he had never accumulated the credits he needed.

Why This Matters for Your Spouse, Too

This isn't just an individual problem. Because of spousal benefit rules, a non-earning or lower-earning spouse can receive up to 50% of the primary earner's benefit.

If the primary earner fails to accumulate enough credits, it doesn't just impact them—it can eliminate a critical source of retirement income for their partner as well.

Reason #2: Remarriage

First, a quick refresher on spousal benefits.

If you are divorced from a spouse you were married to for at least 10 years, you may be entitled to receive benefits based on their work record.

Similarly, as a widow or widower, you may be eligible for survivor benefits. These benefits are a financial lifeline for many, particularly for those who may have spent years out of the workforce to raise a family and have a limited earnings record of their own.

But here’s the critical rule that catches so many by surprise.

When Remarriage Ends Your Benefits:

As a general rule, if you are receiving benefits based on an ex-spouse's record, those payments will stop if you remarry.

The Social Security Administration (SSA) views your new marriage as the start of a new financial union, assuming you will now rely on your new spouse for support.

The timing is everything. Pay close attention to these age-based cutoffs:

• If you remarry before you turn 60, you will lose any spousal benefits you were receiving from a divorced spouse.

• If you are receiving survivor benefits as a widow or widower (and are not disabled), the same rule applies: remarrying before age 60 will terminate those payments.

• For those receiving survivor benefits due to a disability, the age limit is lower. Remarrying before age 50 will end your benefits.

Potential Risk of Remarriage

You might think, "That's fine, I'll just claim benefits on my new spouse's record." That may be an option, but it's not always an equal trade. What happens if your new spouse doesn't have a strong work history?

Imagine you were receiving $1800 a month based on your high-earning ex-spouse's record. If you remarry and your new spouse has a limited earnings history, the spousal benefit you could claim from them could be nothing at all.

That’s a significant income drop that could drastically alter your retirement budget.

Reason #3: Increased Medicare Premiums

When you enroll in Medicare, the standard premium for Medicare Part B is automatically deducted from your monthly Social Security benefit.

In 2025, that standard premium is $185 a month. While this reduces your net payment, it’s a predictable amount that can be factored into a budget.

However, if your income is above a certain level, that standard deduction is just the beginning.

Income-Related Monthly Adjustment Amount

This is where the real surprise lies for many. High-income retirees are subject to something called the Income-Related Monthly Adjustment Amount, or IRMAA.

Think of IRMAA as an extra charge (a surcharge) added on top of your standard Medicare premium.

The Social Security Administration determines if you owe this extra amount by looking at the Modified Adjusted Gross Income (MAGI) you reported on your tax return from two years ago. (For your 2025 premiums, they’ll be looking at your 2023 tax return).

This means that income from pensions, large IRA or 401(k) withdrawals, or even the sale of an asset can trigger these higher premiums.

How This Affects Social Security:

So, how much are we talking about? The impact of IRMAA is significant.

Instead of a simple $185 deduction, you could see up to $628 come directly out of your Social Security check each month to cover your Part B premiums if your income is high enough.

And here’s the most critical part: that’s per person.

For a married couple who both fall into a higher income bracket, this isn't a $628 deduction. It's potentially over $1,250 disappearing from their combined benefits every single month before they can spend a dime of it.

Reason #4: Retiring Abroad

In today's digital age, it’s easy to assume that as long as you have direct deposit set up with a U.S. bank, the SSA doesn't need to know your physical whereabouts. This is a dangerous misconception.

The SSA needs to confirm that you are still eligible to receive benefits, and one of their primary methods for doing this is by sending a questionnaire through the regular mail.

These forms, typically sent every 1 to 2 years, verify your residency status, any work activity, and other key eligibility details.

If you don’t update your foreign address with the SSA, you won't receive the form. And if you don't fill it out and return it promptly, the SSA will assume you may no longer be eligible and can pause your payments until you clear things up.

The Six-Month Rule for Non-U.S. Citizens

The rules become even stricter for non-citizens who have earned benefits. There's a common misunderstanding that once you qualify, you can move back to your home country and receive payments for life.

In reality, non-citizens can generally only receive their benefits for up to 6 consecutive months while living outside the United States. After that six-month period, their payments will be frozen.

To "reset the clock," they must be physically present in the U.S. for at least 30 full, consecutive days. This requirement to return periodically can be a major hurdle for those who plan to live abroad permanently.

Restricted Countries

Finally, there are some countries where the U.S. government simply cannot send payments, regardless of your citizenship. The U.S. Department of the Treasury maintains a list of restricted countries.

For example, the SSA is prohibited from sending payments to anyone living in Cuba or North Korea.

Even for countries where payments are allowed, there may be special restrictions or agreements in place that affect how you receive your benefits.

The SSA has an online "Payments Abroad Screening Tool" that can help you understand the rules for a specific country. For clear and definitive answers based on your personal situation, contact the SSA directly to discuss your plans.

Reason #5: Incarceration

The Social Security Administration's policy is clear-cut: if you are convicted of a crime and confined to a jail, prison, or another penal institution for more than 30 consecutive days, your Social Security payments will be suspended.

This rule applies across the board to retirement, survivor, and disability benefits.

The reasoning behind this policy is that your basic needs—such as food, housing, and medical care—are being provided for by the correctional facility. Therefore, the government deems the Social Security payments unnecessary during that period.

It's a Suspension, Not a Termination

Now for the good news: this loss is not permanent. Your eligibility for benefits is not erased. Think of it as a temporary pause, not a final termination. Once you are released, you can have your payments restored.

However, and this is the most critical part, the payments do not restart automatically.

The responsibility falls on you to inform the Social Security Administration of your release. To get your benefits flowing again, you must contact the SSA and provide them with your name, Social Security number, and official date of release.

If you or a family member are in this situation, the most important action is to remember to contact the SSA immediately upon release.

Reason #6: Outstanding Debt

While a private company can’t typically touch your benefits if you have outstanding debts, Uncle Sam can absolutely pay itself back.

Your Social Security can be garnished to cover a range of federal obligations, including:

• Unpaid federal income taxes

• Defaulted federal student loans

• Delinquent Small Business Administration (SBA) loans

Ignoring these debts won't make them go away. The government has the authority to collect them directly from your retirement benefits.

Family Obligations

While owing the government is serious, the rules for court-ordered family support are even more severe. If you have unpaid child support or alimony, your Social Security benefits are very much at risk.

Here’s where it gets really serious:

• Garnishments for child support and alimony take priority over almost any other deduction.

• The courts can order a garnishment of up to 65% of your Social Security benefits to cover these family obligations.

An unpaid child support bill doesn't just vanish when your kids turn 18. It remains a legally enforceable debt that can follow you for decades, waiting to be collected from your Social Security checks once you retire.

The same can be true for alimony, depending on the terms of your divorce decree and state law.

Forgetting about these long-standing obligations can lead to a devastating reduction in the income you were counting on for your retirement years.

Don’t wait for retirement to find out if an old debt will come back to haunt you. If you have outstanding federal debts or past-due family support obligations, it is critical to address them now.

Reason #7: Part-Time Work

One of the most appealing retirement strategies is to ease into it.

You might plan to claim your Social Security benefits early—say, at age 62 or 65—while still working part-time or running a side hustle to supplement your income. It sounds like the perfect way to have the best of both worlds.

Unfortunately, this is one of the most common and costly traps in retirement planning.

As one commenter I read about angrily discovered, working a full-time job at age 65 while collecting benefits caused him to lose all of his Social Security payments for an entire year.

This happens because of a rule called the Social Security earnings limit, or earnings test.

How the Earnings Limit Works

This rule is critical, but it only applies under a specific condition: you are working AND you are collecting benefits before you have reached your Full Retirement Age (FRA). (For anyone born in 1960 or later, your FRA is age 67).

If you meet both of those conditions, your earnings are subject to a limit. Here are the rules for 2025:

• Annual Limit: You can earn up to $23,240 for the year without any penalty.

• Reduction Formula: For every $2 you earn above that limit, the Social Security Administration will temporarily withhold $1 from your benefit payments.

Let's look at a quick example.

Say you are 64, collecting benefits, and you earn $33,240 from a part-time job. That is $10,000 over the limit.

Applying the formula, the SSA would withhold $5,000 of your benefits over the course of the year. Depending on your monthly benefit amount, that could wipe out several months of payments entirely.

Full Retirement Age

This is the most important part to remember: the earnings limit is not permanent. The moment you reach your Full Retirement Age, the rule vanishes completely.

Starting in the month you hit your FRA, you can earn any amount of money—whether it's $50,000 or $500,000 a year—and your Social Security benefit will not be reduced by a single penny. The test is officially over.

If you plan to work in retirement and collect benefits before your Full Retirement Age, you must run the numbers.

Carefully project your annual earnings and calculate the potential benefit reduction. You may find that the income from your job significantly reduces, or even eliminates, your Social Security payments.

This knowledge might lead you to a different strategy, such as waiting to claim your benefits until you’ve fully stopped working or have reached your FRA.

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