When you claim Social Security could be one of the most important financial decisions you ever make.
Deciding when to begin taking Social Security benefits is multifaceted — and it should be factored into your broader retirement plan, not decided in isolation.
You can claim Social Security as early as age 62 or as late as age 70. The difference between claiming at the right time versus the wrong time can mean well over $100,000 in lifetime benefits — sometimes significantly more for married couples when survivor benefits are taken into account.
Popular wisdom suggests claiming as soon as you’re eligible. But longer life expectancies have changed that calculation. Waiting is often the more advantageous strategy — though there is no one-size-fits-all answer. The right decision depends on your health, your other income sources, your spouse’s situation, and your overall retirement plan.
At Scarborough Capital Management, we’re able to build a personalized Social Security analysis for clients — modeling your specific scenarios in detail, including the claiming strategies that others may not know to consider.
How Social Security Benefits Work
QUALIFYING FOR BENEFITS
When you work and pay taxes under the Federal Insurance Contributions Act (FICA), you earn “credits” toward Social Security retirement benefits. Credits are based on annual earnings, with a maximum of four credits per year. Once you have acquired 40 credits (approximately 10 years of employment), you are fully insured and eligible to receive retirement benefits.
2026 FICA reference figures:
| FICA Figure | 2026 Amount |
|---|---|
| Taxable earnings base | $184,500 |
| Earnings required for one credit | $1,890 |
| Earnings required for 4 credits (max/year) | $7,560 |
YOUR FULL RETIREMENT AGE (FRA)
Your Primary Insurance Amount (PIA) is the monthly benefit for which you are eligible at your Full Retirement Age.
The Social Security Administration calculates your PIA using your best 35 years of employment (adjusted for inflation). If you continue working after reaching FRA, the SSA will automatically recalculate your benefits each year — if your current income exceeds any of your prior best 35 years, your benefit will be adjusted upward.
FRA varies based on your year of birth:
| Year Born | Full Retirement Age |
|---|---|
| 1937 or earlier | 65 |
| 1938–1942 | 65 + 2 months for each year after 1937 |
| 1943–1954 | 66 |
| 1955–1959 | 66 + 2 months for each year after 1954 |
| 1960 or later | 67 |
COLLECTING BEFORE YOUR FULL RETIREMENT AGE
You may begin collecting benefits as early as age 62, but doing so permanently reduces your monthly benefit. The amount of reduction depends on your FRA and how many months early you begin collecting.
Key takeaway
Delaying benefits past your Full Retirement Age earns you a Delayed Retirement Credit (DRC) of 8% per year for every year you defer between FRA and age 70. This increase is in addition to annual COLAs. Benefits max out at age 70 — there is no advantage to delaying beyond that.
| Collection Age | Effect on Benefit |
|---|---|
| Age 62 | Reduced up to 30% permanently (vs. FRA benefit) |
| FRA (66–67 depending on birth year) | Full PIA — no reduction |
| Age 68 | 108% of PIA (if FRA is 67) |
| Age 69 | 116% of PIA (if FRA is 67) |
| Age 70 | 124% of PIA (if FRA is 67) — benefits max out at 70 |
| Note: If FRA is 66 | Waiting until 70 = 132% of PIA |
2026 EARNINGS LIMITS
(if collecting before FRA while working)
| Situation | Earnings Rule |
|---|---|
| Under FRA (entire year) | $1 withheld for every $2 earned above $24,480 |
| Year you reach FRA (months before FRA) | $1 withheld for every $3 earned above $65,160 |
| Month you reach FRA and beyond | Unlimited — no earnings test applies |
TAXATION OF SOCIAL SECURITY BENEFITS
Approximately one-third of Social Security recipients pay income taxes on their benefits. The amount subject to tax depends on your “provisional income” — which equals half your Social Security benefit plus your modified adjusted gross income.
New in 2025 — One, Big, Beautiful Bill
Individuals age 65 and older may now be able to reduce taxes owed on their Social Security benefits through a deduction introduced by the One, Big, Beautiful Bill. Consult your tax advisor to understand whether this deduction applies to your situation.
| Filing Status | Provisional Income Range | % of SS Benefits Taxable |
|---|---|---|
| Single | $0 – $25,000 | 0% |
| Single | $25,000 – $34,000 | Up to 50% |
| Single | Above $34,000 | Up to 85% |
| Married Filing Jointly | $0 – $32,000 | 0% |
| Married Filing Jointly | $32,000 – $44,000 | Up to 50% |
| Married Filing Jointly | Above $44,000 | Up to 85% |
Spousal, Survivor, and Family Benefits
Survivor benefit example (assumes higher earner has FRA of 67, PIA of $2,200)
| Higher Earner Collects At | Higher Earner's Monthly Benefit | Lower Earner's Survivor Benefit |
|---|---|---|
| Age 62 | $1,540 | $1,815 |
| FRA (67) | $2,200 | $2,200 |
| Age 70 | $2,728 | $2,728 |
Assumes lower earner has attained FRA prior to collecting survivor benefits. Source: BlackRock.
Why the higher earner’s claiming age matters so much for married couples
The higher earner’s decision about when to claim directly determines what the surviving spouse will receive for the rest of their life. If the higher earner delays to age 70, the survivor benefit is also based on that larger amount. In many married couples, this single decision can add $200,000 or more in lifetime household income.
Recent Legislative Changes
Social Security Fairness Act of 2025
The Social Security Fairness Act of 2025 eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) — provisions that had reduced or eliminated Social Security benefits for millions of Americans who received a government pension from employment that did not pay FICA taxes.
Affected individuals include: teachers, firefighters, and police officers in many states; federal employees covered by the Civil Service Retirement System; and people whose work was covered by a foreign social security system. The changes are retroactively effective for benefits payable after December 2023.
What Your SCM Social Security Analysis Includes
Comparison of key claiming age scenarios (62, FRA, 70, and key ages in between)
Breakeven analysis — when does delaying begin to pay off?
Spousal benefit strategies — maximizing combined lifetime income
Survivor benefit modeling — protecting the surviving spouse’s income
Divorced spouse benefit eligibility, if applicable
Coordination with pension, IRA withdrawals, and other income sources
Tax impact of different claiming strategies
Government pension / WEP/GPO impact analysis for affected clients
Overall retirement income sequencing
HOW TO BECOME A 401(K) MILLIONAIRE
5 THINGS RETIREES SHOULD KNOW ABOUT SOCIAL SECURITY BENEFITS
WHEN IS IT TIME FOR A FINANCIAL REVIEW?
Don’t guess on Social Security. The right analysis can be worth more than you think.
Schedule a free, no-obligation consultation. We’ll run your personalized analysis and show you exactly what’s at stake with each option.
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Sources: BlackRock; Social Security Administration; Internal Revenue Service. Please see the Social Security Administration’s website at www.ssa.gov for more information, restrictions and limitations about Social Security benefits. This material should be regarded as informational on Social Security and is not intended to provide specific advice. If you have questions regarding your particular situation, you should contact the Social Security Administration and/or your legal or tax advisors.
This material is provided for educational purposes only and does not constitute investment advice. The information contained herein is based on current tax laws, which may change in the future. BlackRock cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in these materials does not constitute any legal, tax or accounting advice. Please consult with a qualified professional for this type of advice.
Advisory services offered through Scarborough Capital Management, a federally registered investment adviser. Registration does not imply a certain level of skill or training.