Toys “R” Us Plans 120 Holiday Pop-Ups as a Retiree Learns Extra Work Can Threaten Social Security Benefits

Taking a seasonal job at a holiday retailer may seem like an easy way for a new retiree to bring in extra money, but even a little more work can sometimes reduce a month of Social Security payments.

Toys “R” Us is opening 120 standalone stores across the U.S. for the holiday season, raising its total to 160. That expansion means more cash register and stockroom shifts, and many of those openings may attract recent retirees hoping to earn a bit of spending money.

Take Mike, a hypothetical 62-year-old retiree. He left his full-time job at the end of June after earning $40,000 for the year and began collecting Social Security in July at age 62. His full benefit would have been $2,500, but claiming early reduces it by 30%, leaving him with $1,750 a month. A holiday job seems harmless until a coworker points out that Social Security may take back part of it.

Mike is not the only early retiree concerned about this issue. Many people who retire before full retirement age keep their work hours low because they worry that extra earnings will reduce their Social Security checks.

All Earnings Count Toward the $24,480 Limit

Before reaching age 67, the age that applies to most people nearing retirement now, Social Security withholds $1 for every $2 earned above an annual limit. For 2026, that limit is $24,480.

The limit applies to wages from all jobs combined. For example, a retiree who earns $22,000 from part-time bookkeeping and then adds $5,000 from a holiday store would end up with $27,000 in wages. That places him over the limit, and $1,260 in benefits would be withheld. Either job alone would have stayed under the threshold.

A $2,040 Monthly Test Can Protect the First Year

On paper, Mike appears to have a problem. The $40,000 he earned from his old job was already far above $24,480 before he received his first check. But there is a special rule for this exact situation, and it applies only during the first year of retirement.

Under that rule, Social Security pays a full monthly check for any month in which you earn $2,040 or less in wages and do not perform substantial self-employment work. That means more than 45 hours a month in your own business, or 15 to 45 hours in a highly skilled one.

If Mike earns $1,900 in both November and December, he keeps every payment, even though his annual income reaches $43,800.

If extra holiday shifts raise his December wages to $2,600, that month no longer qualifies for the special rule. Because his yearly earnings already exceed the limit, Social Security would withhold his $1,750 benefit for December. One extra week at the store could cost him a full month’s check.

This protection usually lasts only one year. After that, Mike will be subject to the annual earnings limit of $25,560, so next year’s holiday wages will be counted with all other income for the year.

Withheld Benefits Can Be Recalculated Later

Withheld benefits are not always gone for good. When Mike reaches full retirement age at 67, Social Security will recalculate his benefit to account for the months it withheld. That slightly reduces the effect of claiming early and increases his monthly benefit going forward.

For Mike, credit for one withheld month would raise his benefit by about $10 a month starting at 67, before inflation adjustments. At that pace, it would take roughly 14 years to recover the $1,750 payment, putting the break-even point around age 81. Living longer helps, but the extra holiday pay comes with a clear trade-off.

Check the Numbers Before Taking Extra Shifts

Before agreeing to a shift, multiply your hourly wage by the number of hours you expect to work each month, and include overtime, since retailers often add hours in December. In the first year of retirement, the monthly amount is what matters. After that, add up your wages for the year and compare the total with the annual limit.

It is also wise to notify Social Security about any change in earnings before you begin working. Updating the estimate early gives the agency time to adjust payments along the way. Otherwise, it may discover the extra income later and ask you to repay benefits already issued.

Small details can make a big difference. Whether the wages are earned in one month or another, or whether the work is done as an employee or an independent contractor, can affect how Social Security counts the income. Review your work schedule and expected pay before taking the job.