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The issue is not of having income - regardless if that is income from wages or from self-employment - but having income will trigger tax liability.
So during "fat" years when your income is relatively larger - you may make contributions into qualified retirement plan and defer tax liability.
So during years with relatively low income you will take distribution to supplement your social security income and will have lower tax liability.Another issue that a social security may be partly taxable - and that what you meant under the "penalty"
So if you are below your full retirement age - you might better to stop your social security benefits and let them grow.
You may do that up to age 70.