Social Security Elections: How To Choose?

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As you plan for your retirement, you are faced with many choices. One choice that many don’t give enough attention is when to begin Social Security payments, claiming them as soon as they are eligible at age 62. However, the age you choose to claim Social Security can not only affect your benefits but can impact your family as well.

Social Security benefits make up 50% or more of the income for 62% of Americans age 65 and older, according to AARP. Deciding when to make your claim is complex and can be affected by different factors. By exploring various Social Security options as part of your broader retirement plan, you can help maximize your benefit for life.


Americans today are living longer today than they were in 1935 when President Franklin D. Roosevelt signed the Social Security Act into law. According to the U.S. Census Bureau, in 1950 there were 2,300 – 100 year old Americans in contrast to 2010, when there were 80,000 – 100 year old Americans.


To qualify for Social Security, you have to earn a minimum of 40 “credits” over your working life, with a maximum of four credits per year. While the amount needed to earn a credit has changed, in 2015, you receive one credit for every $1,220 you earn, up to a maximum of four credits per year for $4,880.

No matter what your full retirement age is, you can start collecting Early Retirement Reduced Benefits at age 62. You are eligible for your Full Retirement Benefits depending on your year of birth; anyone born after 1937 is eligible at age 65. If you choose to delay when you claim your Full Retirement Benefits until age 69 you may be eligible to receive an extra 3% – 8% more.


Your Social Security benefit is just one component of your retirement income. As you determine when to begin your Social Security benefit, you need to calculate how much you believe you will need in retirement and look at your combined sources of income, such as any pension or investment income you may have accumulated.


There are several factors that should affect your decision:

  • Work: If you plan on working, there are limits on how much you can earn between age 62 and your full retirement age and still get all your benefits.
  • Longevity: About one out of every four 65-year-olds today will live past age 90. One out of 10 will live past 95. You need to plan for all your retirement sources to last for as long as a 20-30 year retirement.
  • Taxes: Depending on your supplemental income and marital status, you may owe taxes on your benefits. No one pays federal income tax on more than 85% of their Social Security benefits based on Internal Revenue Service rules.
  • Spouse: Spousal benefits are among the most advantageous and should be evaluated when considering the best way to maximize benefits. Social Security does have a family maximum that is based on the primary earner’s average wages.


With significant differences in life-time payout of benefits, you want to ensure you carefully examine all your options. As a Social Security Advisor, I can create benefit projections and develop strategies for your top election options based on your personal financial assets and retirement goals. Contact me to set up a complementary consultation to review your individual Social Security Election Options.