Retirement is a time when people can relax after a lifetime of work. Or is it? Before you can actually kick back in the rocking chair or book that round-the-world cruise, there are financial decisions to be made. Claiming Social Security is one crucial decision. There are a number of factors to consider before claiming benefits and it (literally) pays to consider all the angles. In order to obtain the highest amount of monthly income from Social Security, you must wait until age 70 to claim benefits, which can be up to 77% bigger if you wait. This is generally the best course of action.
However, there are some situations where it makes sense to claim benefits earlier. If you are considering taking benefits before full retirement age (66-67 depending on when you were born), think about whether or not you will still be working in retirement. Income from work can reduce your Social Security benefits further. You only get the entire benefit when you are fully-retired, according to the Social Security Administration. In 2025, that means you earn less than $23,400 from paid work this year. If you earn more than this and have not yet reached full retirement age, the SSA will reduce your benefits by $1 for every $2 you earn over this limit. That can really add up quickly. Someone earning $50,000 in retirement would forfeit $13,300 in benefits.
You would get that back in increments once you reach full retirement age, so you could re-coup some of that over time. However, this limit on paid work is one more reason to carefully consider whether claiming Social Security before age 70 makes financial sense.
The best advice is to carefully plan for retirement well before you take the plunge. We can help you run through all the numbers and figure out how to navigate the minefield that is government benefits. You earned those Social Security benefits and it’s important to make the most of them.
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