For a growing share of Americans, retirement is no longer a clear transition but a gradual shift — a “slow fade” marked by continued work even after Social Security benefits begin. New research from the Center for Retirement Research at Boston College shows that roughly 40% of beneficiaries combine work and Social Security at some point, reflecting both financial pressures and shifting views on what later-life work should look like.

This evolving pattern is visible across income groups, though the motivations differ widely. For some, work is a necessity that supplements inadequate savings. For others, earning income while claiming benefits serves as a bridge to more flexible, purpose-driven careers. What is clear is that Social Security — designed in the 1930s for those exiting the labor force — is increasingly supporting Americans who continue to participate in it.

A Changing Retirement Landscape

Labor force participation declines sharply after age 62, but earnings still account for more than one-fifth of income for households over age 65. Siyan Liu, co-author of the Boston College study, notes that claimants fall into two distinct groups. Low earners typically claim early and rely heavily on benefits to supplement part-time work. Higher earners, by contrast, tend to claim at full retirement age while maintaining full-time jobs, often resulting in higher total income than before they applied for benefits.

This bifurcation underscores a growing inequality in retirement preparation. While some Americans continue working by choice, many do so out of necessity. According to Pew Research Center data, 17% of workers over 65 say they work solely because they need the income.

How Working Affects Social Security Benefits

Claiming benefits before full retirement age — 67 for those born in 1960 or later — permanently reduces monthly payments. Delaying benefits to age 70 yields an annual increase of roughly 8%, thanks to delayed retirement credits. Yet many workers choose to claim earlier to stabilize income while transitioning careers or reducing work hours.

Those who work and claim before full retirement age may encounter the Social Security earnings test. In 2025, earnings above roughly $23,000 trigger a temporary withholding of benefits. That threshold increases significantly in the year someone reaches full retirement age, and disappears entirely once that month arrives. Although withheld benefits are not returned in a lump sum, the Social Security Administration later adjusts monthly payments upward, allowing retirees to recoup withheld amounts gradually.

Work as a Bridge, Not a Stopgap

For people like Sharon Smith, a former corporate leader who began collecting Social Security at 67 while shifting into executive coaching, working while claiming benefits offered financial stability to pursue an “encore career.” Her experience reflects a trend highlighted by demographer Bradley Schurman, who argues that retirement has transformed into a phased process shaped by longer lifespans, higher costs, and a pension system that no longer mirrors modern economic realities.

Moreover, older adults increasingly report that working improves their emotional well-being. A University of Michigan study found that Americans over 65 experience more positive work outcomes than those in the 50–64 age group, driven by purpose, social interaction, and continued engagement.

Outlook: Retirement Will Keep Getting Later — and More Flexible

Nearly 12 million Americans over 65 remain in the labor force, representing about 7% of all workers — a figure expected to rise to 8.6% by 2032. With longevity increasing and financial preparedness lagging, policymakers, employers, and workers are confronting a new reality: retirement is no longer an event, but a continuum. As Social Security debates intensify in Washington, the growing interplay between work and benefits will remain central to discussions about how to sustain both the labor market and the nation’s primary retirement program.