The traditional image of retirement—working until a specific date and then trading your paycheck for a pension check—is officially outdated.
According to a recent analysis by the Center for Retirement Research at Boston College, the line between “worker” and “retiree” has blurred significantly.
The researchers analyzed decades of data from the Health and Retirement Study conducted by the University of Michigan. They tracked thousands of individuals from age 56 to 75 to see how real people actually behave.
Their central finding is stark: 43% of older Americans work at some point after claiming Social Security benefits, making them the largest group.
Another 37% left the workforce before age 62, meaning they stopped working before they were even eligible to claim Social Security. Only 10% worked past age 62 and waited to claim Social Security until they had fully stopped working.
Who are these working retirees?
The 43% of Americans who work while collecting benefits are not a monolith. The Center for Retirement Research found they fall into two distinct camps with vastly different financial lives.
The majority: Among people who work while collecting benefits, 68% claim benefits early—typically at age 62. Demographically, this group is less likely to have a college degree and more likely to work in physically demanding roles.
For them, claiming isn’t a bonus; it coincides with a financial crash. The data shows their median earnings plummet from $38,700 pre-claim to just $16,500 post-claim. They typically shift from full-time careers to lower-paid part-time work, using Social Security to fill the income gap.
The minority: Among those who work while collecting, 31% wait until their full retirement age to claim Social Security. They typically earn more, have college degrees and continue working full-time. Their earnings don’t drop—they simply add a Social Security check on top of a full salary.
Why do they do it?
For the majority of people who work while collecting Social Security benefits, working is a necessity. They have often been pushed out of their primary careers or physically can’t maintain full-time hours. They claim benefits early because they need the cash flow to survive a transition into part-time work.
For the minority, the motivation is often psychological rather than financial. They treat Social Security as a liquid asset to be tapped as soon as the earnings test penalty vanishes at their full retirement age. (Social Security recipients who work before reaching their full retirement age risk a penalty — a portion of their benefits might be temporarily withheld, depending on how much they earn.)
That’s not the only trade-off, though. By claiming before age 70, this more financially secure group forgoes delayed retirement credits: For each year that you postpone claiming beyond your full retirement age, up to age 70, your Social Security benefit amount increases by up to 8%.
The Center for Retirement Research notes that it’s unclear why this minority chooses to forgo delayed retirement credits by claiming early, considering that they tend to be more financially stable.
Alicia H. Munnell, the center’s senior advisor, concludes:
“The more important implication from this study, however, is that the majority of worker-beneficiaries are low earners who need their Social Security benefits to pay the bills.”
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