This article explains the factors to consider before you file for Social Security benefits. A married couple needs to look at their claiming decision as a joint life decision, not as an individual in a silo. As you work through this process, keep this in mind that claiming Social Security benefits is a one-time decision you must make correctly.
Full Retirement Age
The age at which you qualify for full unreduced monthly benefits. This age ranges from 66 to 67. Any time you claim benefits early, between 62 and your full retirement age, those benefits will always be reduced.
Primary Insurance Amount
The amount equal to your Social Security benefit at full retirement age.
Earnings Limitation
Social Security limits the amount you can earn and still collect benefits if you have not yet reached your full retirement age. This requires Social Security to withhold your monthly Social Security check, if you have earnings from either W-2 wages or self-employment income in excess of $23,400 in 2025. All other forms of income do not count for this limitation, only W-2 wages, and self-employment income. In the year of retirement, and only in that year, you may use the monthly earnings limitation. In subsequent years, you are required to use the annual earnings limitation. At full retirement age, this provision expires, so you can earn any amount of money without any required withholding of benefits. Also at full retirement age, your monthly benefit will automatically be adjusted upwards to pay you back the withheld benefits. So, you never lose the benefits, you just receive them later.
Delayed Retirement Credits
Increase in monthly Social Security benefits, if you delay claiming benefits, after your full retirement age. These credits are awarded up to the age of 70 at 8% per year but are calculated monthly. Your monthly benefit could be increased by as much as 32% if you delay taking benefits to age 70. Delayed retirement credits only accrue to your own Social Security benefit.
Retroactive Benefits
If you file for benefits after your full retirement age and have earned delayed retirement credits, you have the ability to receive a maximum of up to 6 months benefits up front in a lump sum check when you claim your Social Security benefit. The effect of this is to push your retirement filing date back, creating a lower monthly Social Security benefit going forward and a smaller survivor benefit in the future.
Voluntary Suspension
At full retirement age or later, the ability to suspend your own worker benefit to earn delayed retirement credits.
Income Related Monthly Adjustment Amount (IRMAA)
This adjustment amount to your Social Security benefit represents a reduction in your monthly benefit for the payment of Medicare Part B and Part D premiums because you are categorized as a higher income earner. It is based on your Modified Adjusted Gross Income reported on your tax return two years prior.
Remember, take the wrong benefit at the wrong time, it is always smaller, and it is forever.
