Can a retiree get unemployment benefits?
If you are eligible for both unemployment benefits and retirement benefits, you do not have to choose. You can take both, although it is wiser to put off retirement benefits until later. And if you are collecting Social Security retirement benefits and still working, you are also eligible for unemployment benefits. You just have to be laid off through no fault of your own, be looking for work and be ready to take a new job.
Take the benefits!
If you are eligible for unemployment benefits, apply for them right away. In New York State, you apply with the state Department of Labor: dol.ny.gov. During the COVID-19 pandemic, Congress temporarily increased and extended benefits and also extended them to the self-employed, but those emergency programs have since expired.
Are unemployment benefits reduced for retirees?
The answer is: not anymore. Some of our readers may still remember the term “Social Security offset”. In the past, more than a dozen states reduced unemployment benefits for retirees by an amount equal to as much as half of their Social Security retirement benefit. The rules have changed. This reduction was abolished because it discriminated against older people, and age discrimination is illegal in the U.S. Illinois was the last state to abolish the reduction of unemployment benefits for Social Security recipients, on December 4, 2015.
Unemployment benefits and an employer pension
Note: Some states, including Illinois, reduce unemployment benefits for people receiving a pension from an employer or a union. With large pensions, the unemployment benefit may be reduced to zero.
Do unemployment benefits count toward your Social Security benefit?
Many of our readers wonder whether unemployment benefits earn them Social Security credits (quarters of coverage) and whether this income counts toward their retirement benefits.
Unfortunately, no. Unemployment benefits are unearned income, not earned income. Only wages from work and self-employment earnings are subject to Social Security tax and count toward your earnings record.
In 2026 you must earn $1,890 (in 2027 – $1,970) to get one Social Security credit. But if you earned, say, ten thousand dollars and then did not work for half a year, you will be credited with a full year of work.
Should you retire early?
Many people decide to retire early when they lose their job or their unemployment benefits run out. If you have not yet reached full retirement age (67 for people born in 1960 or later), you should be fully aware of the consequences of this step.
Your retirement benefit will be permanently reduced, and the percentage of the reduction depends on how many months early you start. The reduction is 5/9 of one percent for each month up to 36 months, which comes to 6.67 percent a year, plus 5/12 of one percent for each additional month, which comes to 5 percent a year. If your full retirement age is 67, then if you retire at 62 your benefit will be reduced by 30 percent of the full amount.
As a rule, early retirement pays out on average the same total in benefits as delayed retirement: in smaller payments, but over a longer time. The smaller benefits will be paid for the rest of the retiree’s life, including after reaching full retirement age.
A smaller benefit for your spouse
Workers whose spouses may one day collect survivors benefits on their record should think this through carefully. Retiring early can lower the spouse’s survivors benefits if the worker dies. If others depend on you, calculate the consequences of early retirement.
If you are forced to stop working because of poor health, consider applying for disability benefits, which – unlike early retirement benefits – are not reduced on account of age. Strategies for maximizing retirement benefits are described in the book “Ubezpieczenie społeczne Social Security” (“Social Security”).
A layoff as a pretext for discrimination
During the pandemic, thousands of businesses had no choice but to lay off some or even all of their employees, because they had to close their doors. There is no shortage, however, of employers who use job cuts as an opportunity to get rid of older workers. There are plenty of reasons. Older workers earn more than younger ones, get sick more often, which drives up health insurance costs, and are often less able to adapt to remote work, which requires familiarity with modern technology.
You should know that age, along with race, national origin, sex and so on, may not be the basis for decisions about hiring, promotion or dismissal. If your boss complains about hard times but lays off only older workers, talk to a lawyer who specializes in employment law.
Also, do not let yourself be talked into leaving your job voluntarily. If your employer suggests that you should retire because, for example, you are turning 65, know that this is against the law. Apart from a few positions (firefighters, police officers, judges), there is no such thing as a mandatory retirement age in the U.S.
If you go back to work
Let’s say you retire and then find a job. If you have not reached full retirement age, your retirement benefit is reduced by $1 for every $2 you earn above the annual limit: $24,480 in 2026 and $25,560 in 2027. This is called the annual earnings test. In the year you reach full retirement age, the limit is higher ($65,160 in 2026 and $67,920 in 2027, for the months before you reach that age). Once you reach full retirement age, you can work without limit, and your earnings may help increase your benefit.
Important: Retirees deliberately pass up earnings for fear of exceeding this limit. They do not know that the reduction in their benefit will increase their benefits in the future.
If you change your mind
After you apply for retirement, family or survivors benefits, your situation may change and you may regret your decision. Do not worry, because there is a way out, called a withdrawal of application: you withdraw your application within 12 months of being awarded benefits. You will have to pay back all the benefits received up to that point – yours and your family’s – but no interest or penalties are charged. You can withdraw an application only once. When you withdraw your application for Social Security benefits, you may, but do not have to, give up Medicare Part B. More information is available here: www.ssa.gov/benefits/retirement/planner/withdrawal.html
Updated October 2026.
