When Should You Claim Social Security?

For many retirees, deciding when to claim Social Security is one of the most significant financial decisions they'll make. The age at which you begin collecting benefits can have a lasting impact on your retirement income, influencing not only your monthly benefit but also how your retirement savings, investment portfolio, taxes, healthcare costs, and long-term financial goals fit together.

Although there is no universal "right" age to claim Social Security, understanding the advantages and tradeoffs of each option can help you develop a strategy that aligns with your personal financial situation and retirement objectives.

Understanding Your Claiming Options

You may begin claiming Social Security retirement benefits as early as age 62. However, the age at which you file permanently affects the amount of your monthly benefit.

 *Actual percentages vary by birth year and claiming age. Age 67 is used in this graphic as an example of Full Retirement Age (FRA).

• Claiming Early (Age 62): Claiming at 62 results in a permanent reduction of your benefit (up to 30% compared to what you would receive at your Full Retirement Age, depending on your birth year).

  
  

• Full Retirement Age (FRA): FRA is the age at which you are eligible to receive 100% of your earned benefit. For individuals born in 1960 or later, the FRA is 67. For more info on birth year and FRA, see: https://www.ssa.gov/benefits/retirement/planner/agereduction.html

  
  

• Delayed Retirement (Up to Age 70): If you delay claiming benefits past your FRA, your benefit increases by roughly 8% per year until age 70. Delaying to age 70 can increase your monthly payments by up to 24% compared to taking them at FRA (based on age 67). There is no additional increase for delaying claims beyond age 70.

Factors to Consider

Deciding when to file is not a one-size-fits-all strategy. The right time to claim benefits depends heavily on individual circumstances, including:

1.        Your Health & Life Expectancy

One of the biggest considerations is how long you expect to receive benefits.

• Individuals with shorter life expectancies or significant health concerns may prefer receiving benefits earlier.

• Those who expect a longer retirement may benefit from delaying benefits to receive a larger monthly payment.

  
  

Since no one knows exactly how long they will live, this decision should be viewed as part of an overall retirement income strategy rather than a life expectancy prediction.

2.        Your Retirement Income Needs

• Will Social Security be your primary source of retirement income?

• Can your investment portfolio support delaying benefits?

• Would claiming earlier reduce withdrawals from retirement accounts?

Some retirees claim benefits early because they need the income immediately, while others delay benefits to help preserve investment assets during retirement.

3.        Your Spouse & Family

Married couples may find value from coordinating their claiming decisions rather than making them independently.

Important considerations include:

• A spouse may be eligible for a spousal benefit of up to 50% of the higher-earning spouse's Full Retirement Age benefit if eligibility requirements are met.

• Delaying benefits of the high earner may increase the survivor benefit available to a surviving spouse because survivors generally receive the larger of the two monthly benefits.

• Divorced individuals who were married for at least 10 years may also qualify for benefits based on an ex-spouse's earnings record if certain SSA requirements are met.

4.        Tax Implication

Social Security benefits may be subject to federal income tax depending on your combined income. Some states also tax Social Security benefits, while many do not. Because taxes can affect your overall retirement income strategy, it's often beneficial to coordinate your claiming decision with your tax professional.

5.        Working While Receiving Benefits

If you claim benefits before reaching your Full Retirement Age and continue working, your benefits may be temporarily reduced if your earnings exceed the Social Security earnings limit.

These withheld benefits are not permanently lost. Once you reach Full Retirement Age, Social Security recalculates your benefit to account for months in which benefits were withheld, and the earnings limit no longer applies.

Coordinating Social Security and Medicare

Claiming Social Security before 65 triggers automatic enrollment in Medicare Parts A and B at age 65.

Delaying Social Security past 65 means you must manually sign up for Medicare during your initial window. Missing your Medicare enrollment deadline can permanently increase your lifetime premiums and delay medical coverage.

Coordinate both timelines carefully to avoid unexpected, permanent healthcare cost increases.

Conclusion: Finding Your Personal Strategy

Deciding when to claim Social Security is a deeply personal choice that requires balancing current financial needs with long-term stability. Ultimately, the "right" age to claim is the one that gives you the greatest sense of control over your retirement.

Social Security claiming decisions should be based on an individual’s specific circumstances. Consult with your financial, tax, and legal professionals before making any claiming decisions.

John P. Freund is registered with and securities are offered through Kovack Securities, Inc. Member FINRA/SIPC. 6451 N. Federal Highway, Suite 1201, Ft. Lauderdale, FL 33308 (954) 782-4771 Investment Advisory services are offered through Kovack Advisors, Inc. Naples Financial Solutions, LLC is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc.

Naples Financial Solutions does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Naples Financial Solutions cannot guarantee that the information herein is accurate, complete, or timely. Naples Financial Solutions makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

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