Social Security remains a significant source of income for many retirees, and yet, I’m reminded regularly just how little most people understand about the benefits they have coming to them.
Month after month, the educational workshops I hold are packed with people trying to learn more, and I sympathize with their struggle.
I’m actually drawing Social Security benefits myself. I have Medicare, and I’m a widower. Plus, I’m in my 50th year of working in the financial services industry.
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So, I know how challenging it can be to keep up with the many rules and rule changes and look past the myths and misconceptions.
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My recommendation, of course, is to work with a knowledgeable financial adviser who can lead you through the process while taking into account every personal factor that could affect your family’s future.
Attending one workshop (or reading a few online articles) simply isn’t enough to get through all the ands, ifs and buts that go into claiming your Social Security benefits — especially if you’re married.
Wondering where to start? Here’s a look at five things soon-to-be retirees should know about filing for Social Security — but often don’t:
1. You can file when you turn 62, but your payments will be permanently reduced
To be eligible to receive 100% of your earned benefits, you must reach what the Social Security Administration (SSA) refers to as your full retirement age (FRA), which currently ranges from 66 to 67, depending on your birth year.
Additionally, if you put off filing until you’re past your FRA, you’ll get a delayed retirement credit every year (until you turn 70) that will boost the amount of your benefit.
For many people, that extra money is well worth the wait. But there are multiple factors to consider here.
If you’re healthy and you and your spouse expect to live a long life in retirement, one or both of you may want to delay filing as long as possible. That way, you can keep growing your benefit. But if you need the money now, or if your health isn’t great, you might choose to file earlier.
You can get an estimate of what your payments might look like at different ages by signing up for a “my Social Security account” at www.ssa.gov/myaccount.
Our firm and many others also have planning software that can help you determine which filing age makes sense for you.
2. Marital status matters — even if you’re an ex
Most people underestimate how critical it is to coordinate their filing decisions with their spouse — because it will not only affect the income both can count on in retirement but also what the widowed spouse will receive.
Many couples don’t realize that if they’re both receiving Social Security benefits when one spouse dies, the lower of their two Social Security payments will go away almost immediately.
There are actually several rules that can affect the benefit a widow or widower receives, including their age when their spouse passes, if they have a disability and/or if they’re caring for a child from the marriage who is younger than 16 or has a disability that began before he or she turned 22.
There are also rules that allow divorced spouses to file for a spousal or survivor’s benefit on an ex’s Social Security record — if they were married for at least 10 years. But again, when and how much you receive can vary if you qualify for this benefit.
Because so many couples get divorced these days — and may even remarry and divorce again — this is a topic I get many questions about.
To ensure that you get the highest payment possible, share the details of all your marriages with your financial adviser — and with the SSA when you file. (And by the way, your ex won’t know you filed on their record unless you tell them.)
3. You can keep working after you file, but you may be subject to an earnings test
Social Security recipients can keep working, but if you choose to do so and you exceed the SSA’s age-based earnings threshold, some of your benefit may be temporarily withheld from you. Here’s how it works:
- For individuals younger than their FRA, the annual earnings limit for 2025 is $23,400. If you exceed this threshold, the SSA will withhold $1 for every $2 you earn over that amount.
- If you will reach your FRA in 2025, the earnings limit for the months before your birthday will be $62,160, and $1 will be deducted from your benefits for every $3 you earn over that amount.
Once you actually attain your FRA, the earnings limit goes away. It’s also important to note that the SSA will recalculate and increase your monthly payment at this time to make up for the funds withheld earlier.
4. Yes, a portion of your benefits may be taxed
Until it came up during the 2024 presidential election, many soon-to-be retirees were unaware that their Social Security benefits could be taxed. Most people I talk with still don’t understand how this tax works.
The IRS will look at your “provisional” or combined income to determine if you must pay federal income taxes on a percentage of your benefits. (Provisional income is calculated by adding your adjusted gross income for the year, any tax-free interest you received and 50% of your Social Security benefits.)
If you’re filing as an individual and your provisional income is between $25,000 and $34,000, or if you’re filing a joint return and have provisional income of between $32,000 and $44,000, you may have to pay federal income taxes on up to 50% of your benefits.
Also note that you might have to pay income taxes on up to 85% of your benefits if your provisional income is higher than those amounts.
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In 2024, President Trump proposed eliminating federal taxes on Social Security benefits, but that policy has not been enacted so far. The One Big Beautiful Bill that Congress passed did provide significant tax relief for many older taxpayers, however.
Effective for 2025 through 2028, eligible taxpayers (based on income and marital status) who are 65 or older may claim an additional deduction of $6,000 on their income tax.
Still, if you plan to withdraw money from a tax-deferred retirement plan while you’re also collecting Social Security, it’s likely you could end up paying taxes on your benefit. Taxes also could become an issue if you decide to keep working after you and/or your spouse claim your benefits.
Bracket management is a must. Whether you qualify for the new tax break or not, tax-mitigating strategies should be part of your retirement plan.
5. You can get a filing do-over (with limitations)
If you change your mind after you file for your benefits, you can withdraw your application and reapply later. However, this is a one-time-only opportunity, and you must withdraw within 12 months.
You’ll also have to repay any Social Security benefits you received.
Bonus tip: You don’t have to go it alone
Clearly, there are many moving parts here. But you don’t have to walk alone through this process. You can start by gathering information from the SSA website.
When you’re ready, be sure to work with a retirement specialist who’s well-versed and up to date on the rules. Don’t lose out on getting the full benefits you’ve earned because you didn’t know any better — and you didn’t ask.
Kim Franke-Folstad contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.