4 Unexpected Ways Retirees Could Lose Social Security Benefits in 2026

For many people, a combination of Social Security and savings can make for a stress-free retirement. But if your benefits end up getting slashed, you may end up struggling financially.

There are different reasons why you might end up with smaller Social Security checks this year. Let's walk through some common – and less common – reasons why retirees lose benefits, and what to do about them.

Earning too much money from a job

There's nothing to stop you from continuing to work while collecting Social Security. And a part-time job could be a great way to supplement your Social Security benefits.

But if you're collecting benefits and working prior to full retirement age, you'll be subject to an earnings test. And making too much money could result in having a portion of your benefits withheld.

This year, you'll have $1 in Social Security withheld for every $2 earned above $24,480 if you haven't yet reached full retirement age and won't reach it by Dec. 31. If you'll reach full retirement age by Dec. 31, you'll have $1 in Social Security withheld for every $3 earned above $65,160.

Higher earnings from wages could shrink your Social Security checks substantially. You could even be left with $0 in benefits until full retirement age arrives.

Be mindful of Social Security's earnings test limits, since they can change from year to year. You may want to strategically keep your wages below a certain threshold to avoid withheld benefits.

Or, aim to hold off on claiming Social Security until full retirement age. The earnings test won't apply to you in that case. Plus, if you wait until full retirement age to claim benefits, you won't face a reduction for filing early.

Withheld benefits under the earnings test are repaid to you later. But the reduction in benefits you face by claiming benefits before full retirement age is generally permanent.

IRMAAs that increase Medicare premiums

Most Medicare enrollees pay a standard monthly premium for Medicare Part B. But if you're a higher earner, you could face a surcharge on your Part B premiums known as an income-related monthly adjustment amount, or IRMAA.

The thresholds at which IRMAAs apply change annually, and they're based on income from two years prior. But when added to the standard Part B premium, IRMAAs can reduce your Social Security checks substantially, since Part B premiums are automatically deducted from monthly benefits for those enrolled in Medicare.

In 2026, the standard monthly Medicare Part B premium is $202.90. IRMAAs for part B, however, can go as high as $487 a month on top of that standard premium, depending on income.

IRMAAs also apply to Part D drug plans. Unlike Medicare Parts A and B, the Social Security Administration (SSA) does not process enrollments in Part D plans.

Social Security recipients with a Part D drug plan can request to have their premiums deducted from their monthly benefits, though it's not automatic like for Part B. Either way, the end result could be smaller Social Security checks.

To reduce your chances of facing IRMAAs, time retirement plan withdrawals strategically so you're not taking huge distributions any given year. Or, try to do Roth conversions ahead of retirement so your withdrawals don't count as taxable income and don't push you into IRMAA territory.

Incarceration

If you're incarcerated, your Social Security benefits are suspended after 30 consecutive days in prison, though the SSA can reinstate your benefits beginning the month after the month you're released. During this time, your spouse or children may be eligible for benefits, but you won't be paid that money yourself.

There are plenty of obvious reasons why some people wind up in jail, but certain crimes are less obvious. Be aware that actions like tax evasion and fraud could, in some cases, result in jail time. And aim to consult an attorney if you're ever contemplating an activity that seems questionable from a legal standpoint.

Taxes on benefits

While Social Security benefits aren't always subject to federal taxes, those taxes apply to recipients with moderate combined incomes or higher. Combined income is calculated by adding your adjusted gross income, nontaxable interest, and half of your Social Security benefits.

If your combined income is above $25,000 as a single tax-filer or $32,000 as a married couple filing jointly, you could be taxed on up to 85% of your benefits. The result? Less Social Security for you to spend.

To avoid having your benefits taxed, use similar strategies to avoiding IRMAAs. Time your traditional retirement plan withdrawals strategically so you're not taking large amounts of money out within a single year. And if possible, do Roth conversions ahead of retirement (or save in a Roth account to begin with).

Bottom line

Seniors are often surprised when their Social Security checks aren't as high as expected. Now that you know why this sometimes happens, you can take steps to avoid a reduction in benefits.

It's also a good idea to read up on how Social Security works. That way, you'll be able to understand what other scenarios might cause your benefits to be clawed back or reduced. Staying informed is a key way to ensure your retirement plan is on track.

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