One bad early retirement blunder could cost you $1 for every $2 earned — how to protect your golden years

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===h&&i&&b.test(window.location.search)&&(i.checked=!0)};ge("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(no)),notifLabel:document.querySelector(".".concat(oo))};t.notifDropdown&&mo(e,t)}))}()}};]]>ADVERTISEMENTEmma Caplan-FisherMon, April 13, 2026 at 12:15 PM GMT+2 5 min readYou’ve been counting down to retirement for years, but claiming Social Security early while continuing to work can cost you thousands in benefits. This trap affects more people than you might think.According to the Social Security Administration (SSA), if you claim benefits before your full retirement age and earn above $24,480 in 2026, $1 in benefits is withheld for every $2 you earn over that limit.Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's howRobert Kiyosaki this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’Taxes are going to change for retirees under Trump’s ‘big beautiful bill’ — here are 4 reasons you can’t afford to waste timeThese reductions can add up, delaying or reducing your payments while you’re still working. It’s just one of the landmines waiting for people who don’t do their homework before leaving the workforce.The appeal of claiming at 62 is real: you get money sooner, potentially for years longer. But it comes at a permanent cost. The SSA confirms that workers born in 1960 or later who claim at 62 receive only 70% of their full retirement benefit; a 30% permanent reduction follows every payment for the rest of their lives (1).Early claiming makes sense for some. For example, if you’re in poor health, have a shorter life expectancy or need income to cover expenses until Medicare kicks in at 65, collecting at 62 may be financially prudent.AARP’s analysis finds the “break-even age” — when waiting maximizes lifetime benefits — is usually around 78 to 80. If you don’t expect to live past that, claiming early might be smarter (2).Problems arise when people assume they can collect benefits and keep working without limits. The $24,480 earnings threshold in 2026 applies to all wages, bonuses, and self-employment income. Pensions, investment returns, and Social Security itself do not count.The silver lining: withheld benefits aren’t lost. Once you reach full retirement age (FRA), the SSA recalculates your monthly payment to credit back the months that were reduced. Still, the temporary cash-flow disruption can be significant for those who aren’t prepared (3).Read More: How to apply Dave Ramsey’s 7 Baby Steps to your own lifeEarly retirees often face a harsh surprise: health care costs, especially if they retire before 65 and lose employer coverage before Medicare eligibility.Fidelity’s 2025 Retiree Health Care Cost Estimate projects $172,500 in medical expenses throughout retirement for a 65-year-old retiring in 2025, not including long-term care. 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