Social Security

Your benefit is based on your earnings history and the age at which you claim — with full retirement age as the reference point.

• How your earnings history feeds the benefit. Your benefit is calculated from your highest 35 years of earnings, indexed for wage growth. Years with no earnings count as zeros, so a longer, fuller work record generally produces a higher benefit.
• What full retirement age means. Full retirement age (FRA) is the age at which you receive 100% of your calculated benefit. For anyone born in 1960 or later, FRA is 67. It’s the reference point against which claiming early or late is measured.
• How claiming early or late adjusts it. You can claim as early as 62 or as late as 70. Claiming before FRA permanently reduces your monthly benefit; delaying past it earns ‘delayed retirement credits’ of about 8% a year. Claiming at 62 gives roughly 70% of your full benefit, while waiting to 70 gives about 124%.

There’s no universally right age — the best timing depends on your health, your other income, whether you’re still working, and your marital situation.

• Reasons to claim earlier. You need the income, you’re in poorer health or expect a shorter life, or you’d otherwise have to sell investments you’d rather leave to grow. Note the earnings test: if you claim before FRA and keep working, benefits are temporarily reduced above an earnings limit ($24,480 in 2026), though that reduction is restored later.
• Reasons to wait. Each year you delay between FRA and 70 raises your benefit by about 8% — guaranteed and inflation-linked for life, a return that’s hard to match elsewhere. Waiting also lifts the survivor benefit a spouse may one day inherit.
• How health and other income factor in. If you expect a long life, delaying often pays off; if not, claiming earlier may. Other income — a pension, or a portfolio you can draw on to ‘bridge’ the years to 70 — affects whether waiting is realistic in the first place.

• Coordinating claims as a couple. Married couples have two benefits and two claiming ages to coordinate. A common approach is for the lower earner to claim earlier while the higher earner delays — maximising the benefit that will later continue as a survivor benefit.
• Spousal benefits. A spouse can receive up to 50% of the higher earner’s full-retirement-age benefit if that’s more than their own. Spousal benefits don’t earn delayed credits, so there’s no advantage to claiming them after FRA.
• Survivor benefits. When one spouse dies, the survivor generally keeps the larger of the two benefits — which is why delaying the higher earner’s claim can protect a surviving partner. Survivor benefits can be claimed as early as 60, under different rules from retirement benefits.

• Pairing it with portfolio withdrawals. Because Social Security is guaranteed and inflation-linked, it’s often treated as the dependable base that covers essential spending, with portfolio withdrawals layered on top for the rest.
• Tax treatment of benefits. Up to 85% of your Social Security benefit can be subject to federal income tax, depending on your ‘combined income.’ How you draw from other accounts can influence how much of your benefit is taxed.
• Bridging income if you retire before claiming. If you stop working before you claim — to let your benefit grow toward 70 — you’ll need another source to bridge the gap, often planned withdrawals from savings during those years.

Get your Social Security timing right

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