Skip to main content

Social Security Retirement Benefits: How and When Should You File?

September 16, 2020 | By Eric Siss, CFP® and Matt Gordon, CFP®, RLP®
LinkedIn Icon Facebook Icon Twitter Icon Email Icon

The decision on when to file for retirement benefits warrants careful consideration.
According to, the maximum monthly Social Security retirement benefit that an individual can receive per month in 2020 is $3,790 for someone who files at age 70. For someone at full retirement age, the maximum amount is $3,011, and for someone aged 62, the maximum amount is $2,265. 


While having a plan is useful, there are circumstances that may require a change in course. As a result of the COVID-19 crisis, many have lost their income and need cash flow now.  


As with all financial decisions, there is no one size fits all solution when it comes to filing for – or changing – your Social Security retirement benefits. In this insight, we’ll cover:


  • Projecting your Benefits
  • Life Expectancy and Social Security
  • How Marriage Affects your Benefits
  • How to “Undo” your Benefits
  • Social Security Planning and your Overall Financial Picture
  • Making an Informed Decision


Projecting Your Social Security Retirement Benefits


The benefit awarded is based upon your earnings history indexed for changes in living standards over time. The monthly benefit amount is called your Primary Insurance Amount (PIA). The PIA is then anchored to your full retirement age (FRA). Your full retirement age is determined by your date of birth. You can find your full retirement age by referencing this retirement benefits chart. You can check your projected benefit anytime by registering for an account with  


Once you have a sense of your retirement benefit, the three scenarios you are faced with are, take your benefit early, wait until full retirement age, delay your benefit. The implications of which are defined below:   


  • Take your Retirement Benefit Early – Between 62 and Full Retirement Age. Your benefits will be reduced by as much as 25% at age 62. 
  • Wait Until Full Retirement Age – You will collect 100% of the benefit.
  • Delay your Retirement Benefit – Between Full Retirement Age and age 70. Your benefits will increase by as much as 32% by age 70. 

Life Expectancy 


People are often eager to file for benefits when they reach age 62. After all, they have worked and paid into the system for many years. While it may be appealing to take benefits as soon as possible, the math may not be as compelling.


According to a life expectancy calculator provided by the Social Security Administration:  

  • A man turning age 65 on April 1, 2020 can expect to live, on average, until age 84.0.
  • A woman turning age 65 on April 1, 2020 can expect to live, on average, until age 86.5.


Of course, life expectancy calculators simply provide averages. Family history and lifestyle are important factors when evaluating your unique circumstance. 


A break-even analysis is used to determine how long you would need to live to make deferring your benefit worthwhile. If you delay taking Social Security retirement benefits and pass away before the breakeven point, you will have collected less by having waited. On the flip side, if you take benefits early, and live a long life, the cumulative benefit you collected may be hundreds of thousands of dollars less than if you waited. 

Consider the following example: An individual is deciding between the following A) $1,500 per month at age 62 B) $2,000 per month at age 66 and C) 2,640 per month at age 70. The cumulative benefits received for each scenario are expressed in the chart below:

Social Security Retirement Benefits-chart


This individual has a breakeven age of 77.9 when comparing taking benefits early to full retirement age benefits, a breakeven age of 82.4 when comparing full retirement age benefits to delayed benefits and a breakeven age of 80.5 when comparing early benefits to delayed benefits.


When viewed through a different lens, Social Security can be considered a form of longevity insurance. Moreover, Social Security benefits are adjusted annually for inflation. For these reasons, Social Security benefits continue to be an important cornerstone of retirement, especially as fewer and fewer employers offer traditional pension plans.  

How Marriage Affects Social Security Retirement Benefits

To assess the impact of taking Social Security at different ages, one must consider the relationship between their benefit, their spouse’s benefit, and their life expectancy.  

For married couples, it is important to keep in mind that when one spouse dies, the surviving spouse will continue to receive their own benefit or their spouse’s benefit, whichever is higher. If the higher earning spouse can wait until age 70 and obtain the maximum benefit, then no matter which spouse dies first, the survivor will continue receiving the maximum benefit for the rest of their life.    

While the average life expectancy for an individual is age 84-86.5 range (men/women), it is notable that the joint life expectancy for a 65 year old couple is closer to age 89. In other words, when calculating the break-even age, one should consider joint life expectancy and understand that there is a decent probability that at least one spouse could live well into their 90’s. 

You might have heard of some filing strategies for married couples such as “File and Suspend” and “Restricted Application”. In 2016, new rules were established which eliminated “File and Suspend” and phased out “Restricted Applications” for anyone born after 1/2/1954. 

You may also have questions regarding Social Security benefits in case of a divorce or if you are a widow. We can help with these situations as well. 

Possible “Undo” Button for your Social Security Retirement Benefits  

If you chose to take Social Security benefits early and now wish that you had not done so, there are a few ways that you could possibly ‘undo’ that election. 

You could pay back up to 12 months of Social Security benefits, thereby restoring some credits.

If you have not yet reached your full retirement age, you could go back to work. In which case, the earnings cap would come into effect.

Finally, if you already reached full retirement age, but are not yet 70 years old, you could suspend benefits to effectively earn credits to make up for the penalty from taking early. Note that if you suspend benefits, ‘spousal benefits’ are also suspended.  

Social Security Planning and your Overall Financial Picture  

When looking solely at cumulative lifetime benefits, it may be advantageous to wait to take Social Security at age 70. Of course, delaying payments can put a strain on other financial resources.    

Taking Social Security at full retirement age may mean less withdrawals are needed from your IRA to cover expenses. Distributions from a Traditional IRA are fully taxable as ordinary income whereas Social Security income enjoys tax benefits. Only the first 85% of Social Security income is taxable on the Federal level. In addition, many states, such as New York, do not impose tax on Social Security income. 

One may also consider filing for benefits prior to age 70 if they deem it a bad time to take money out of their investments as a result of a down market.   

On the other hand, taking Social Security prior to age 70 could limit the effectiveness of tax planning strategies. For example, it may limit the effectiveness of doing Roth conversions as Social Security income might push you into a higher tax bracket. 

The bottom line: filing for Social Security should be analyzed in conjunction with your whole financial picture.

Viability of Social Security 


One question that often comes to mind is the viability of the Social Security system in the first place, especially in the next 20 to 30 years. Some estimates anticipate reserves to be depleted as early as 2032. At which point, projected inflows will only be sufficient to meet about 79% of projected outflows.


While concerning, lawmakers are likely to make revisions to the current structure. Some ideas that have been proposed include, raising the amount of income that is subject to Social Security tax, the rate on said tax, raising the Full Retirement Age, and reducing benefits. It is highly unlikely that Social Security will disappear entirely.


While it is impossible to say how Social Security will change, it is important to stay up to date and, to the extent you are able, minimize your long-term financial reliance on the benefits.  

Steps for Making an Informed Decision 

Making an informed decision on Social Security will impact not only your long-term cash flow, it will also impact how much you need to withdraw from your portfolio and strategies aimed at saving on taxes throughout retirement. We can help navigate this decision if you follow these 2 steps:  

Step 1. Request a statement from  This will show you benefits projections and your earnings history. 

Step 2. Meet with your financial advisor — ideally a fiduciary who can assist with your overall retirement plan — to review the math and determine a strategy on when to take Social Security in a manner that fits best with your overall financial plan.

Want to learn more about how a financial advisor can help with Social Security planning? Contact us today. 

Selling An Estate Checklist

Sign Up And Never Miss An Article