Retirement Strategy Guide
Social Security Claiming Strategy: A Guide for Pre-Retirees
The decision of when and how to claim Social Security is one of the most consequential choices you will make in retirement planning. Once made, it is largely irreversible. This guide walks through the key variables, the trade-offs at each claiming age, and how this decision fits into your broader retirement income strategy.
$0 to $4,873
Estimated monthly benefit range in 2026, depending on earnings history and claiming age (SSA.gov)
Up to 32%
Reduction in monthly benefit when claiming at 62 vs. full retirement age, depending on birth year (SSA.gov)
8% per year
Delayed retirement credits earned for each year you wait beyond full retirement age, up to age 70 (SSA.gov)
The Foundation
What Is a Social Security Claiming Strategy?
A Social Security claiming strategy is the deliberate plan for when, and in what sequence, you and your spouse (if applicable) begin drawing Social Security retirement benefits. Because monthly benefit amounts vary significantly depending on the age you claim, from as early as 62 to as late as 70, and because that amount is then adjusted annually for inflation through cost-of-living adjustments (COLAs), the timing decision can meaningfully shape lifetime retirement income.
For executives and professionals nearing retirement, this decision does not exist in isolation. It interacts with portfolio withdrawal sequencing, tax bracket management, healthcare coverage before Medicare at age 65, pension income, and spousal benefit coordination. A well-constructed claiming strategy considers all of these variables together as part of a broader retirement income sequencing plan, not as separate decisions made at different points in time.
According to the Social Security Administration, the average retired worker received approximately $1,925 per month in benefits as of early 2026. However, individuals who delay claiming to age 70 may receive substantially more, depending on their earnings history. Results vary based on your specific earnings record and claiming decisions.
The Decision Framework
Four Variables That Drive Your Claiming Decision
No single claiming age is right for everyone. These four variables, considered together, form the foundation of any sound Social Security strategy.
Your Full Retirement Age (FRA)
Full Retirement Age is the age at which you qualify for 100% of your calculated primary insurance amount (PIA). For those born in 1960 or later, FRA is 67. Claiming before FRA permanently reduces your monthly benefit. Claiming after FRA increases it, up to age 70. Understanding your FRA is the baseline for every other calculation.
Health Status and Longevity Outlook
Social Security is, at its core, a longevity hedge. Delaying benefits generally makes sense if you expect to live into your mid-80s or beyond, because the higher monthly amount eventually surpasses the cumulative value of earlier, smaller payments. Conversely, if health considerations suggest a shorter horizon, claiming earlier may be appropriate. Your personal situation should guide this analysis, not a generic rule.
Retirement Income Sequencing
Delaying Social Security requires drawing from other assets, such as retirement accounts or taxable investments, to cover living expenses in the interim. This sequencing decision affects tax exposure, portfolio longevity, and Medicare premium calculations. For high-income professionals, coordinating the claiming age with Roth conversion windows and required minimum distribution (RMD) timing can be particularly meaningful, though results depend on individual tax circumstances.
Spousal and Survivor Benefit Coordination
For married couples, the claiming decision is a joint optimization problem. A spouse may be eligible for a benefit based on your earnings record, up to 50% of your PIA. Additionally, the survivor benefit is based on the higher earner's benefit at the time of death. This means the higher earner delaying to 70 could significantly increase the survivor's lifetime income in the event of the higher earner's earlier death. These dynamics require coordinated planning, not individual decisions made separately.
Scenario Comparison
Claiming Age Scenarios: Key Trade-Offs
The table below illustrates how claiming age affects benefit amount, break-even timing, and strategic fit. All figures are illustrative and reflect general SSA rules for those born in 1960 or later (FRA = 67). Your actual benefit will vary based on your earnings history and individual circumstances.
| Claiming Age | Benefit vs. FRA | Approximate Break-Even vs. Waiting to FRA | Best Fit Scenario | Primary Trade-Off |
|---|---|---|---|---|
| Age 62 | Approximately 70% of FRA benefit (30% reduction) | Approximately age 79-80 | Health concerns, immediate income need, lower earner in a couple | Permanently reduced monthly income; may limit survivor benefit |
| Age 65 | Approximately 86-88% of FRA benefit | Approximately age 79-81 | Medicare eligibility aligns; bridging from early retirement | Still below full benefit; reduced survivor protection |
| Age 67 (FRA) | 100% of calculated benefit | Baseline — no break-even calculation needed | Average health outlook; portfolio preservation priority | Leaves delayed credits on the table; no longevity bonus |
| Age 70 | Approximately 124% of FRA benefit | Approximately age 82-83 vs. claiming at FRA | Strong longevity outlook; higher earner in couple; Roth conversion window strategy | Requires 3 years of portfolio drawdown before claiming; interim tax planning complexity |
Source: SSA.gov. Benefit percentages and break-even ages are approximate and reflect general rules for those with an FRA of 67. Individual results will vary. This table is for educational purposes only and does not constitute a personalized recommendation.
Understanding the Math
The Break-Even Analysis: What It Tells You and What It Misses
Break-even analysis calculates the age at which cumulative lifetime benefits from a later claiming age surpass those from an earlier age. If you opt for claiming early at 62 instead of 70, you receive smaller checks for more years. The break-even point is the age at which the person who waited has received the same total dollars as the person who claimed early, and beyond which the later claimer comes out ahead.
For most individuals born in 1960 or later, the break-even between claiming at 62 versus 70 is approximately age 80 to 82, depending on individual earnings and assumptions used. According to the Social Security Administration, the average life expectancy for a 65-year-old in the United States is approximately 84 to 87 years, though individual results vary widely.
However, break-even analysis has real limitations. It does not account for the time value of money, investment returns earned on early payments, the tax treatment of benefits, portfolio sequencing risk, or spousal considerations. A break-even calculation is a useful starting point, but it should not be the final word in your Social Security decision.
What Break-Even Analysis Does Not Capture
Tax Bracket Interaction
Up to 85% of Social Security benefits may be taxable depending on combined income. Claiming timing affects which tax brackets apply throughout retirement.
IRMAA Surcharges
Higher income years, including early retirement Roth conversions or large portfolio distributions, can trigger Income-Related Monthly Adjustment Amount (IRMAA) surcharges on Medicare Part B and D premiums.
Portfolio Sequence-of-Returns Risk
Drawing down a portfolio in early retirement to delay Social Security may expose assets to sequence-of-returns risk, where early market downturns could reduce the long-term value of the delay strategy.
Survivor Benefit Value
The value of the survivor benefit to a spouse cannot be fully captured in a simple break-even calculation, particularly when there is a significant age gap or income disparity between spouses.
Married Couples
Spousal Benefit Coordination: A Joint Strategy
For married couples, Social Security claiming is a household-level decision. The SSA allows a spouse to claim either their own earned benefit or a spousal benefit worth up to 50% of the other spouse's PIA, whichever is higher. This rule creates planning opportunities that single filers do not have access to.
In households where one spouse earned significantly more over their career, a common approach is to have the lower earner claim earlier, providing current income while the higher earner delays to age 70 to maximize the benefit. This also maximizes the survivor benefit, which reverts to the higher of the two benefit amounts after one spouse passes. Because women statistically outlive men, and because executives in higher-earning roles are often the primary earner, this coordination strategy may be particularly relevant to the households we work with. Individual circumstances will always vary.
It is worth noting that the so-called "file and suspend" strategy, which previously allowed one spouse to trigger spousal benefits while the other suspended and earned delayed credits, was largely eliminated by the Bipartisan Budget Act of 2015. Current rules require the primary earner to actually be collecting benefits before a spousal benefit becomes available, with limited exceptions. Strategies must be designed around the rules as they exist today.
Divorced individuals may also qualify for benefits based on an ex-spouse's record if the marriage lasted at least 10 years and they are currently unmarried. This is an often-overlooked dimension of claiming strategy that can meaningfully affect retirement income planning.
Spousal Coordination Checklist
Income Sequencing
How Claiming Age Fits Into Your Retirement Income Plan
Social Security does not operate as a stand-alone decision. It is one component of a retirement income distribution planning framework that may include 401(k) and IRA distributions, taxable investment accounts, pension income, annuity payments, and real estate. How and when each of these sources is drawn from affects tax liability, Medicare premiums, and portfolio longevity throughout retirement.
For executives and professionals retiring in their early-to-mid 60s, the years between retirement and Social Security claiming at 70 are sometimes called the "income gap" window. This period may offer a valuable opportunity to draw from pre-tax accounts at lower rates, conduct Roth conversions in lower-income years, and position assets efficiently before required minimum distributions (RMDs) begin at age 73 under current law.
The 2026 RMD rules require most traditional IRA and 401(k) owners to begin distributions at age 73. Depending on account size, these distributions can push retirees into higher tax brackets and trigger IRMAA surcharges on Medicare premiums. A coordinated strategy that considers Social Security timing alongside RMD planning may help manage this exposure, though actual outcomes depend on individual tax circumstances and should be reviewed with a qualified tax professional.
A Sample Income Sequencing Framework
For illustrative purposes only. Individual strategy will vary.
Ages 62-65: Bridge Period
Draw from taxable accounts and/or cash reserves. Preserve pre-tax accounts. Evaluate lower-earner spouse's claiming.
Ages 65-70: Roth Conversion Window
Medicare begins at 65. Systematically convert traditional IRA funds to Roth while income remains lower and before Social Security adds to the taxable base.
Age 70: Higher Earner Claims Social Security
Maximized delayed credits locked in. Social Security income begins, reducing need for portfolio distributions and extending portfolio runway.
Age 73+: RMDs Begin
Required minimum distributions from pre-tax accounts layer onto Social Security income. Roth assets provide tax-free flexibility without RMD obligations under current law.
New Horizons Boutique Financial Services
Social Security Strategy Is One Piece of a Larger Retirement Plan
At New Horizons Boutique Financial Services, we approach Social Security not as a checkbox but as one component of a fully integrated retirement strategy. Our team, led by Lars Engman, intentionally limits client count so every relationship receives the attention it deserves. We build each plan around your specific goals, income sources, tax situation, and timeline, before recommending any course of action.
Whether you are 5 years from retirement or actively evaluating your readiness today, we offer a structured, strategy-first conversation that begins with where you are and maps a clear path to where you want to go. There is no pressure and no template. Every plan is built from scratch. If you are in the East Metro, learn more about working with a fee-only financial advisor in Woodbury.
Schedule a ConversationRetirement Strategy Development
Comprehensive planning that integrates Social Security, portfolio distribution, tax positioning, and income sequencing into a single coordinated strategy.
Financial Independence Planning
For executives evaluating whether they are truly ready to stop working, this analysis examines assets, projected income, and expenses to answer that question with clarity and confidence.
Tax Optimization Planning
Designed to coordinate investment decisions, Roth conversions, RMD timing, and Social Security claiming to seek to reduce unnecessary tax exposure throughout retirement. Results depend on individual tax circumstances.
Common Questions
Frequently Asked Questions About Social Security Claiming
What is the best Social Security claiming strategy for married couples?
There is no single best strategy because the optimal approach depends on each spouse's earnings history, health, age difference, and other income sources. A common framework is to have the lower earner claim earlier while the higher earner delays to age 70 to maximize the benefit that also becomes the survivor benefit. However, this should be modeled against your specific numbers before a decision is made.
What happens if I claim Social Security before full retirement age and keep working?
If you claim before your full retirement age (67 for those born in 1960 or later) and continue to earn income, the SSA applies an earnings test. In 2026, if you are under FRA for the full year and earn more than $22,320, $1 of benefit is withheld for every $2 earned above that threshold. Once you reach FRA, the earnings test no longer applies and withheld amounts are factored back into your benefit going forward. These thresholds are subject to annual adjustment.
Is Social Security income taxable?
Yes, potentially. Up to 85% of Social Security benefits may be subject to federal income tax depending on your "combined income," which is defined as adjusted gross income plus non-taxable interest plus half of your Social Security benefits. At combined income above $44,000 for married filing jointly (as of 2026), up to 85% of benefits may be taxable. Minnesota taxes Social Security benefits for higher-income residents, though deductions are available. The interaction of Social Security timing and tax exposure is one of the more nuanced areas of retirement planning in Minnesota.
Can I change my mind after I start collecting Social Security?
In limited circumstances, yes. Within the first 12 months of beginning benefits, you may file a "withdrawal of application" (SSA Form 521), repay all benefits received, and restart at a later age as if you had never claimed. After 12 months, this option is generally no longer available. Additionally, once you reach full retirement age, you may suspend benefits to earn delayed retirement credits until age 70, though spousal benefits based on your record would also be suspended. These rules underscore why the initial claiming decision deserves careful analysis before it is made.
How much will Social Security increase in 2026?
The 2026 cost-of-living adjustment (COLA) for Social Security benefits was set at 2.5%, as announced by the Social Security Administration. This means existing beneficiaries saw their monthly payments increase by 2.5% beginning in January 2026. COLA is calculated annually based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and is applied to all Social Security retirement, disability, and survivor benefits.
What is the difference between Social Security FRA and the break-even age?
Full Retirement Age (FRA) is the age at which you qualify for 100% of your calculated benefit, set by law based on birth year. The break-even age is a separate calculation: it is the point in time at which the total cumulative benefits from a later claiming age surpass those of an earlier one. These are often confused. FRA is a fixed statutory threshold; break-even age is a personal projection that changes based on your benefit amount, claiming age alternatives, and longevity assumptions.