Understanding Social Security Benefits: When to Claim and How Much You'll Get

By National Finance Connect | March 28, 2026 | Retirement Planning

The average American leaves tens of thousands of dollars on the table by claiming Social Security at the wrong time. Most people file at 62 — the earliest possible age — without realizing they could receive 77% more per month by waiting until 70. This decision is irreversible. Get it right.

How Social Security Benefits Are Calculated

Your benefit is based on your 35 highest-earning years of work history. The SSA applies a formula to your Average Indexed Monthly Earnings (AIME) to produce your Primary Insurance Amount (PIA) — the benefit you'd receive at your Full Retirement Age (FRA).

Your FRA depends on your birth year:

• Born 1943–1954: FRA is 66
• Born 1955–1959: FRA phases up (66 and 2 months, 66 and 4 months, etc.)
• Born 1960 or later: FRA is 67

You can check your estimated benefit at ssa.gov/myaccount — it's free and takes 5 minutes to set up.

The Three Claiming Ages: 62, FRA, and 70

Claiming at 62 (Early)

You can start benefits as early as 62, but your benefit is permanently reduced — up to 30% less than your FRA benefit. Example: if your FRA benefit would be $2,000/month, claiming at 62 gives you $1,400/month. For life.

Reasons to claim at 62: poor health or short life expectancy, financial necessity, or you have no intention of working and your spouse has a higher benefit for survivor purposes.

Claiming at Full Retirement Age (FRA)

You receive 100% of your calculated benefit. This is the break-even baseline. For most people born after 1960, FRA is 67.

Claiming at 70 (Delayed)

For every year you delay past FRA, your benefit grows by 8% per year — a guaranteed return almost no investment can match. If your FRA benefit is $2,000 at 67, waiting until 70 gives you $2,480/month — 24% more, permanently. That's an extra $5,760/year, every year for the rest of your life.

The break-even age for delaying from 67 to 70 is approximately 82–83. If you expect to live past that — and most people who make it to 62 do — delaying pays off significantly.

Spousal and Survivor Benefits

Spousal benefits

A spouse who never worked (or has a low earnings record) can receive up to 50% of the higher-earning spouse's FRA benefit. This is based solely on the higher earner's record, not the spouse's work history.

Survivor benefits

When a spouse dies, the surviving spouse can receive up to 100% of the deceased spouse's benefit. This is why the higher earner delaying to 70 is often the optimal strategy for couples — it maximizes the survivor benefit for whoever outlives the other.

Divorced spouses

If you were married for at least 10 years and are currently unmarried, you can claim a spousal benefit based on your ex-spouse's record (without affecting their benefit at all).

Working While Receiving Social Security

If you claim before FRA and continue working, your benefits are temporarily reduced if your earnings exceed $22,320/year (2026 limit) — $1 withheld for every $2 over the limit. These withheld benefits aren't lost; they're added back to your benefit calculation after you reach FRA.

After you reach FRA, you can earn any amount with no reduction in benefits.

Are Social Security Benefits Taxable?

Yes, potentially. Up to 85% of your Social Security benefit can be taxable, depending on your "combined income" (adjusted gross income + nontaxable interest + half your Social Security benefit):

• Combined income under $25,000 (single) / $32,000 (married): benefits generally not taxable
• $25,000–$34,000 single / $32,000–$44,000 married: up to 50% of benefits taxable
• Over $34,000 single / $44,000 married: up to 85% of benefits taxable

Roth IRA withdrawals and tax-free interest do not count toward this threshold — another reason Roth conversions in the years before claiming Social Security can be strategically valuable.

Social Security Optimization: When a Financial Advisor Helps Most

A Social Security claiming decision involves longevity assumptions, coordination with other income sources, tax planning, and spousal strategy. For married couples especially, the interaction between claiming ages, survivor benefits, and pension income creates real complexity. A retirement-focused financial advisor can model multiple scenarios and help you identify the strategy that maximizes lifetime income — often finding $50,000–$100,000+ in additional cumulative benefits.