When you claim Social Security can have a significant impact on the income you receive throughout retirement. Employees are often surprised to learn that the difference between claiming benefits at 62 and waiting until later in life can add up to $100,000 or more across their lifetime. That said, waiting until the last possible moment to claim isn’t always the right move either for your retirement.
Your health, life expectancy, other sources of retirement income, and spouse’s benefits all influence when it makes sense to claim. Knowing how your options impact your broader retirement strategy is the key to making a deliberate choice based on your personal circumstances, not a general rule of thumb.
Here are some of the key factors to consider as you evaluate your Social Security timing.
An Overview of Social Security Benefits
You can begin claiming Social Security retirement benefits as early as age 62. However, claiming early comes with a permanent reduction in your monthly benefit.
For anyone born in 1960 or later, full retirement age (FRA) is 67. Once you hit FRA, you become eligible for 100% of the benefit calculated from your earnings history. You have the option to delay Social Security beyond your FRA, allowing your monthly benefit to continue increasing each month incrementally until you hit age 70.
Your benefit is calculated using your highest 35 years of earnings, adjusted for inflation, to determine your average indexed monthly earnings. This amount is then used to calculate your primary insurance amount.
Your claiming window is around eight years in total, and the age you choose to begin receiving benefits permanently affects the amount of income Social Security provides throughout retirement.
In fact, when you choose to begin collecting Social Security is one of the most impactful decisions you’ll make in retirement. Once you begin collecting, your opportunity to withdraw the application is limited to 12 months after approval. If you do reverse the decision, you’ll be required to repay any benefits received (and meet other potential requirements).
Once the 12-month period has passed, your claiming decision is final.
Recent Changes to WEP and GPO
Something University of Maine educators and faculty should be aware of is the recent repeal of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). Before 2024, these provisions reduced certain Social Security benefits for people who received pensions from employment where they did not pay Social Security taxes. While University of Maine employees who pay FICA taxes generally were unaffected by these provisions, you or your spouse may have benefits tied to a previous career that fell under the old rules.
WEP primarily affected your own Social Security retirement benefit if you also had a pension from non-covered employment, while GPO could reduce spousal or survivor benefits. With both provisions eliminated, people previously affected may now qualify for higher Social Security income. If you or your spouse has a pension from a job that did not participate in Social Security, review your current benefit eligibility to determine if your retirement plan reflects these changes.
How Reduction and Delayed Credits Work
If your full retirement age is 67 and you claim at 62, your monthly benefit can be reduced by as much as 30%. If you wait until 67, you receive your full calculated benefit. From there, delaying Social Security earns delayed retirement credits of approximately 8% per year until age 70.
In 2026, the average Social Security retirement benefit is $2,071 per month.1
Let’s say you’re eligible to receive $2,000 per month at age 67. Instead, you choose to start claiming as early as possible, at age 62. Your benefit drops to approximately 70.42% of your FRA benefit, or about $1,408 per month. Waiting until 70 would increase it by approximately 124%, or $2,480 per month.
That’s a difference of $1,072 every month between the earliest and latest claiming ages.
Understanding the Break-Even Point
Your break-even point is the age at which the cumulative benefits received by delaying Social Security surpass the cumulative benefits you would have received by claiming earlier. In many common claiming scenarios, that break-even point falls somewhere between ages 78 and 82.
Your personal and family health history, medical conditions, and lifestyle all have the potential to influence your life expectancy.
Take two hypothetical retirees, Carol and Robert. Each is the same age, 62, but has different personal circumstances to consider when deciding the right time to claim Social Security.
In Carol’s family, living well into your 90s is common. She’s in good health and has enough retirement savings to support her lifestyle without immediately needing to claim Social Security. Waiting could give her a larger monthly benefit for the long life she’s anticipating.
Robert, on the other hand, has significant health concerns and a shorter expected lifespan. Receiving benefits earlier may provide greater lifetime value for him, even though his monthly payment will be smaller.
Neither strategy is universally better, as they each best support the person’s individual needs and circumstances.
Coordinating Social Security with Other University Retirement Income
As a University of Maine faculty member, Social Security will be one piece of your larger retirement income plan. You likely will have access to other assets, including a TIAA 403(b), personal retirement accounts, taxable savings, or income from a spouse.
Having multiple sources of retirement income outside of your anticipated Social Security benefits provides some flexibility in determining your timeline for collecting benefits.
For example, you might retire at 65 and use distributions from your TIAA account or personal savings to cover the majority of your expenses for several years. That could allow you to delay Social Security until 67 or 70 and lock in a larger monthly benefit for the rest of your life.
As a tradeoff, you will need to draw more from your portfolio sooner in retirement. Whether that makes sense depends on factors including your savings, investment strategy, tax situation, spending needs, and expected lifespan. The value of delaying Social Security should be weighed against the cost of using other assets to bridge the gap.
Taxes are another important consideration. Depending on your combined income, a portion of your Social Security benefits could be subject to federal income tax. Coordinating when you claim Social Security with when and how you take distributions from retirement accounts will help to manage your taxable income over time.
Social Security Spousal and Survivor Benefits
Social Security timing should be a household decision for married couples. Look at your benefits together, rather than treating them as two separate claiming decisions.
One spouse may be eligible for a Social Security spousal benefit worth up to 50% of the higher earner’s full retirement age benefit, depending on each spouse’s earnings record and claiming circumstances.
When one spouse dies, the surviving spouse may be eligible to receive the higher Social Security benefit. This is important for couples to consider, as the higher earner’s claiming decision can affect income long after their own lifetime.
For example, delaying the higher earner’s benefit can effectively serve as a form of longevity protection for the surviving spouse. A larger Social Security benefit can be valuable later in retirement, if one spouse is left managing expenses with one less Social Security check to depend on.
How to Prepare Your Social Security Strategy
Before deciding when to claim, take a look at how much Social Security you’re likely to be entitled to in retirement.
Create or log in to your my Social Security account and review your earnings record. Checking your earnings history is important because those numbers form the basis of your eventual benefit. You should also be able to see estimates of your monthly benefit at different claiming ages.
It’ll be helpful to model Social Security timing decisions against your TIAA distribution options. Your decision around when to begin one source of income can influence when you need another.
Remember, deciding when to claim Social Security benefits is a permanent income decision. It’s important to see how all the pieces of your retirement income strategy work together before claiming.
Need Help Reviewing Your Options?
A personalized Social Security analysis can help you compare different claiming ages and see how each choice affects your retirement income over time.
If you’re approaching retirement from the University of Maine, Northern Light, or another Maine employer and want help evaluating your options, schedule a Social Security strategy consultation. Together, we can review your benefits and other retirement income sources to build a claiming strategy around your full financial picture.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing.