As you approach retirement and begin evaluating your savings and income streams, Social Security benefits often enter the conversation, prompting various decisions. When to start claiming benefits, combined with 2026 tax and financial updates and other factors like survivorship considerations, can make certain decisions seem complex, but a Social Security strategy can help inform your next steps. If you’re nearing retirement, we’ll share comprehensive pre-retirement planning considerations we guide clients through when evaluating Social Security.
What is Beyond the Monthly Social Security Check?
Many pre-retirees may look at Social Security as another paycheck; however, it’s so much more than that. Social Security can become one of the more powerful strategies to manage longevity risk, while helping to protect survivors and manage taxes and other risks.
Retirees can begin claiming Social Security as early as age 62. After reaching full retirement age (FRA), can choose to delay starting their benefits and earn delayed retirement credits for doing so. Here’s what this means for retirees:
- Delayed retirement credits continue for life.
- Surviving spouses can receive them for their life as well.
- Allowing your Social Security benefits to grow can create greater financial security and flexibility, especially if you live longer or lose a spouse.
What About the Annual Cost-of-Living Adjustment for Social Security?
In 2026, Social Security benefits increased by an annual cost-of-living adjustment (COLA) of 2.8%; however, an important caveat is that Medicare Part B premiums also increased to $202.90 per month.
In essence, the COLA increase was largely offset by higher premiums, making the raise feel less significant, especially for those with smaller benefits. Rather than focusing on the amount of your benefits, we often recommend looking at the inflation-adjusted purchasing power and other benefits Social Security affords based on when you claim.
Why is Timing Social Security Critical for Taxes in Early Retirement?
In the first five years of retirement, retirees often experience a temporary dip in taxable income, especially before required minimum distributions (RMDs) and Social Security benefits begin.
Social Security and other income streams add to your taxable income, can trigger taxes, or push you into higher tax brackets, increasing your Medicare premiums. For these reasons, these lower-taxable income years make it an opportune time to:
- Do a Roth Conversion: Leverage low-tax years to convert traditional IRA savings to a Roth.
- Control Income-Related Adjustment Amounts (IRMAA): IRMAA is a monthly premium surcharge based on your income. Lower-income years allow retirees to control IRMAA.
- Leverage the Bonus Senior Deduction: The bonus senior standard deduction of $6,000 phases out at certain income levels, so managing income is another strategy component.
It’s important to evaluate taking Social Security early in the context of these various areas of retirement that also affect your financial picture. Coordinating your Social Security timing during lower-income years can help you execute several tax strategies that may no longer be available or as flexible when your income increases, and delay benefits to secure higher lifetime payments.
The $1,000-a-Month Waiting Game: 62 vs. 67 vs. 70
As we’ve mentioned, retirees can choose when to claim their Social Security benefits, which affects the total monthly payment they receive. Logging into your Social Security account will provide an estimate of monthly benefits at each key age:
- Retirees can begin claiming as early as age 62. The monthly benefit, however, is reduced, typically by around 30% for claiming early.
- Retirees reach full retirement age at 67 for those born in and after 1960. At FRA, retirees receive their full Social Security benefit.
- Retirees receive an increase in benefits for every year they delay claiming their benefits past their FRA, up to age 70.
- If you delay or receive a higher benefit, surviving spouses who also claim Social Security keep the larger, inflation-adjusted benefit for life.
The increased Social Security benefit can be a meaningful inflation-adjusted income later in retirement, especially for retirees who don’t need the money right away. For example, let’s say a La Jolla retiree’s FRA benefit is $4,152. Here’s what claiming at different ages may look like:
- Age 62: $2,906 per month (less 30%)
- Age 67: $4,152 per month
- Age 70: $5,148 per month (plus 24%, i.e., 8% for each year past FRA)
In this hypothetical example, the retiree who delays until age 70 receives around $27,000 more per year, or more than $500,000 over 20 years of retirement before inflation adjustments, compared to claiming at age 62. For retirees in San Diego and Del Mar, for example, this additional income may be used for coastal property taxes, travel, or healthcare costs while providing significant support for surviving spouses for life.
The “Bridge” Strategy: Spending Assets to Save Benefits
If you’re a high-net-worth retiree, you may not need your Social Security benefits at age 62. In this case, retirees can consider the bridge strategy: delaying claiming benefits by using taxable investments and retirement accounts to fund, or bridge, income through age 70. This approach allows Social Security benefits to continue growing until the maximum benefit is reached.
It may feel counterintuitive to begin drawing from investments before claiming Social Security, but here’s why it can be valuable:
- By delaying Social Security benefits, retirees can earn substantially more in inflation-protected income when they delay Social Security until age 70, rather than taking it at 62.
- Social Security benefits are not affected by markets, while returns on investments are affected by the markets and are not guaranteed.
- This income can be a significant longevity hedge if you live into your 90s, lose a spouse, or face higher healthcare expenses later.
Hidden Tax Traps of 2026: The OBBBA & IRMAA
Additional factors that affect your Social Security strategy and timing include the new senior deduction (with income phaseouts) under the One Big Beautiful Bill Act (OBBBA) and IRMAA surcharges on Medicare. Together, these income-based factors can affect your Social Security benefits, taxes, and overall costs. Here’s what to consider:
- IRMAA is based on your modified adjusted gross income (MAGI). These can quickly and quietly add up by thousands of dollars per year if your income increases due to large RMDs, a Roth conversion, or other scenarios in retirement. Claiming Social Security early adds another layer of taxable income, making it more complex to control your income-based premium payments.
- As part of the OBBBA, eligible seniors may receive an additional $6,000 bonus deduction, helping reduce taxable income and potentially tax liability. One caveat, however, is that the deduction phases out for high-earning retirees. For married couples, filing jointly, phaseouts begin at $150,000 in income. Claiming Social Security early may push you into a higher tax bracket while also reducing or eliminating the deduction altogether.
For these reasons, Social Security decisions should be evaluated in the context of deductions, income thresholds, Medicare premiums, and other factors — not in isolation — to be strategic.
Survivor Protection: The Ultimate Legacy Gift
Another factor to consider when deciding when to claim Social Security is how survivor benefits are affected if one spouse passes away in a household where both were claiming benefits.
- When one spouse dies, the surviving spouse can keep only the larger benefit payment. This means they immediately lose income from the second benefit, although lower. This can also affect the surviving spouse’s tax bracket as a single filer.
- If the higher-earning spouse delays claiming Social Security until age 70 to get the maximum benefit, their surviving spouse will step into that larger payment, which can serve as an inflation-protected income stream for life.
- Unlike a traditional life insurance policy, there are no expirations, premium payments, or market volatility tied to Social Security survivor benefits.
Social Security can become a valuable legacy gift for surviving spouses, equating to hundreds of thousands of dollars over the rest of their lives. We recommend consulting with a financial advisor or Social Security specialist who can help you design a claiming strategy based on your and your spouse’s incomes.
What is the Fiduciary Advantage?
When you partner with a fiduciary, like at Blankinship & Foster, in addition to transparent, objective guidance, they can help you understand the critical intersections of Social Security and managing RMDs, IRMAA surcharges, survivor benefits, and subsequent tax implications.
This becomes even more important as timely legislation, such as the OBBBA, can further affect how Social Security benefits are taxed. If you’re navigating Social Security on your own, you could potentially leave money on the table, execute less effective tax strategies, or put your financial security and your spouse’s survivor benefits at risk.
In addition to when to claim, a financial partner can help you determine how Social Security fits into your broader retirement plan, model hypothetical scenarios, help manage income and thresholds, and more.
With volatile markets and retirees living longer than ever, your Social Security decisions become even more essential. If you’d like guidance on potential situations and claiming strategies or to discuss other critical retirement steps to take this year, please contact us to schedule a 2026 Retirement Income Review with our team.