Social Security Optimization: Claiming at the Right Time

Social Security may seem like a fixed benefit, but the truth is that when you claim it can dramatically impact how much you receive. For high earners approaching retirement, this decision isn’t just about getting a paycheck, it’s about coordinating income, minimizing taxes, and making sure your retirement portfolio lasts as long as you do.

If you’re between 50 and 70 and planning your next move, taking the time to understand your Social Security options could add hundreds of thousands of dollars to your long-term financial picture.

The Basics: Claim Early, Full, or Delay?

You can claim Social Security as early as age 62, but doing so reduces your monthly benefit permanently. If your full retirement age is 67 and you claim at 62, you’ll get 30% less each month. Delay past full retirement age, and you’ll earn an 8% annual increase, up to age 70.

That’s the basic math. But for high-income retirees, the real decision is more layered.

Why High Earners Should Pause Before Claiming Early

If your portfolio is already supporting your lifestyle, claiming early might do more harm than good. It can lock in lower payments for life and add taxable income at a time when you’re still managing required minimum distributions (RMDs) or completing Roth conversions.

Delaying Social Security often gives you a more favorable long-term result, especially when coordinated with proactive tax planning.

Longevity and Spousal Considerations

If you’re in good health and have a family history of longevity, delaying your claim can provide more cumulative value. It’s also important to consider the effect on a surviving spouse.

If one spouse delays and earns a higher benefit, that amount becomes the survivor’s benefit after death. For couples, staggering your claiming strategies—one early, one delayed—can provide both early income and long-term protection.

Watch Out for the Earnings Test

If you’re still working and claim Social Security before full retirement age, your benefit may be reduced. In 2025, the earnings limit is $22,320. Earn above that, and your benefit is temporarily reduced by $1 for every $2 over the limit.

This isn’t a tax, it’s a deferral. But it’s still a reason to wait until full retirement age if you’re earning meaningful income from wages or self-employment.

Tax Implications: The Overlooked Variable

Social Security income becomes taxable once your “combined income” hits $25,000 for individuals or $32,000 for joint filers. Up to 85% of your benefit could be taxed if your income is too high.

For high-net-worth individuals, this is where coordination matters. Claiming too early can crowd your tax bracket, especially when layered with RMDs, pension income, or portfolio withdrawals. Deferring Social Security while drawing from taxable or tax-deferred accounts in a low-income window may reduce your overall lifetime tax burden.

Fitting Social Security Into the Bigger Plan

Social Security isn’t an isolated decision. It should be evaluated alongside your investment withdrawals, insurance plans, charitable giving, and estate strategy. When done well, Social Security can reduce pressure on your portfolio, improve cash flow, and support tax planning efforts.

It’s especially valuable for retirees who want to delay touching certain investment buckets or preserve principal for future inheritance.

Don’t Use a Generic Rule of Thumb

There’s no single “best age” to claim Social Security. Anyone telling you otherwise probably isn’t factoring in your full financial picture. The right strategy depends on your goals, health, income sources, spending needs, and tax exposure.

Instead of asking when to claim, the better question is: what outcome am I optimizing for? Longevity protection? Portfolio preservation? Tax efficiency? Income now?

Claim with Intention, Not Convenience

Making the most of your Social Security benefit means looking at the long game. For some, claiming early makes sense. For others, waiting until 70 pays off many times over. The right move is the one that supports your broader retirement plan, both now and decades from now.

If you’re ready to evaluate your options and determine the most efficient claiming strategy for your situation, reach out to WE Alliance Wealth Advisors. Let’s make your benefits work harder, for longer.