Social Security Clawbacks Are Back: What Retirees Need to Know

If you or someone you love relies on Social Security for monthly income, you need to know about a big change that could impact your budgeting and retirement planning. The Social Security Administration (SSA) is reinstating its full “clawback” policy for overpayments—meaning that, starting March 27, retirees who owe money back to SSA could see their entire monthly benefit withheld, rather than the previous 10% cap. This reversal means seniors may suddenly face a zero-dollar check if the government claims an overpayment, a move that’s expected to recover $7 billion over the next decade but could be devastating for those on fixed incomes.

As I shared with Employee Benefit News, many recipients don’t even know there’s an issue until a formal notice arrives. This policy puts extra pressure on retirees to review their payment history and be proactive about understanding any SSA communications. For financial advisors and wealth management professionals, now’s the time to reach out to clients who depend heavily on Social Security benefits. It’s key to help them request a lower withholding rate if a full clawback jeopardizes housing, food, or healthcare, and to review their entire retirement income strategy to fill any potential income gap. Building an emergency fund and stress-testing cash reserves are crucial steps. With SSA customer service stretched thin and more policy changes possible, working with a fiduciary financial advisor can make navigating these changes far less overwhelming—and help ensure your financial plan stays resilient in uncertain times.

If you have questions about your Social Security benefits, retirement income, or how new policies may affect your plan, let’s connect. As a certified financial planner and independent financial advisor, I’m here to help you stay informed, prepared, and confident about your financial future.

🟢https://www.benefitnews.com/advisers/news/social-security-overpayment-clawbacks-reinstated-at-100