Dear Rusty: My wife was born in July 1959, and her recent SS benefit estimate is $3,337 at her full retirement age, or $4,397 at age 70. She is employed full time and intends to continue working until she is 70. She is wondering when the most financially advantageous time would be to draw her SS retirement.
Signed: Planning Ahead
Dear Planning Ahead: Obviously, the best time for your wife to get the highest possible monthly Social Security benefit would be age 70. Provided your wife’s life expectancy is at least average (about age 87 for a woman her age), she will likely receive the most in cumulative lifetime Social Security benefits by waiting until age 70 to claim.
For clarity, if your wife were to choose to claim before her full retirement age (FRA), her monthly amount would be less and she would be subject to Social Security’s Annual Earnings Test (AET), which limits how much she can earn before her FRA.
If the AET is exceeded, SS will take away $1 for every $2 her earnings are over the limit (they take away by withholding future benefits until the penalty is satisfied). The AET ($23,400 for 2025 but changes yearly) is in effect until your wife reaches her full retirement age of 66 years and 10 months, after which she can earn as must as she likes without penalty.
Since she plans to work full time until age 70, your wife should likely not claim Social Security before her FRA. As mentioned, claiming at age 70 is probably a more prudent financial option.
Since your wife expects to continue working, she should also know that her estimated benefit will likely increase, assuming her more recent earnings are among the highest over her lifetime.
Social Security will review current year earnings annually to see if her current earnings warrant a benefit increase (SS benefits are always based on the highest 35 years of work earnings, and that includes earnings even after SS benefit are started).
Also, the estimates provided by SS do not include Cost of Living Adjustments (COLA), which typically occur annually. FYI, the average annual COLA increase over the past two decades has been about 2.5%.
Based on her estimated FRA benefit, it is also evident that your wife will not get additional benefits as your spouse. For that to occur, your benefit at your FRA would need to be more than twice your wife’s FRA amount, which it likely is not. Thus, your wife should make her claiming decision based only on her own benefit opportunity, considering her personal financial needs and her life expectancy.
FYI, your wife’s break-even age — the age at which she will have collected the same amount of SS money by claiming at age 70 vs. claiming at her full retirement age (FRA), is about 82 years of age. Thus, assuming her life expectancy is more than 82, it would be prudent to wait until age 70 to claim Social Security.
In the end, the best time to claim Social Security depends on a few factors, most notably, life expectancy and financial need. If the SS money isn’t urgently needed now, and your wife’s life expectancy is at least average, then it appears from what you’ve shared that her best choice would be to wait until age 70 to claim Social Security.
If life circumstances change over the years, your wife can take comfort knowing that she can also claim her Social Security at any time before age 70 and she will get benefits right up to the month she claims. Note that by waiting until after her FRA to claim, she will earn Delayed Retirement Credits (DRCs) of .667% more benefit for each month of delay (about 8% more for each year of delay).
Russell Gloor is a certified Social Security adviser by the Association of Mature American Citizens: https://amac.us/social-security-advisor.
