Social Security benefits play a crucial role in retirement planning, providing a steady income stream for millions of retirees. However, many individuals leave thousands of dollars on the table by not optimizing their Social Security strategies.

At TruNorth Advisors, we help retirees navigate the complexities of Social Security to ensure they maximize their lifetime benefits while minimizing taxes and financial risk. In this guide, we’ll explore the best strategies to help you get the most out of your Social Security benefits.

Understanding How Social Security Benefits Are Calculated

Your Social Security monthly benefit amount is based on three main factors:

• Lifetime Earnings – The Social Security Administration (SSA) calculates benefits based on your highest 35 years of earnings.
• Full Retirement Age (FRA) – The age at which you qualify for full benefits (varies from 66 to 67, depending on birth year).
• Claiming Age – Claiming before FRA reduces benefits, while delaying beyond FRA increases them.

Pro Tip: To maximize your benefits, work for at least 35 years and aim to have consistent earnings throughout your career.

The Best Age to Claim Social Security

Age 62 (Early Retirement): Benefits are reduced by up to 30% for your own benefits.

• Age 62 (Early Retirement): Benefits are reduced by up to 30% for your own benefits.
• Full Retirement Age (normal retirement age 66-67): You receive 100% of your benefits.
• Age 70 (Delayed Retirement): Benefits increase by 8% per year past FRA.

Claiming Strategies:

• If you need income early, claiming at 62 may be necessary, but it results in permanently reduced benefits.
• If you can wait until 70, you maximize your monthly Social Security check.

Spousal & Survivor Benefits: Optimizing for Married Couples

Married couples have unique opportunities to maximize Social Security income through  spousal and survivor benefits.

Spousal Benefits:

• A spouse can claim up to 50% of their partner’s benefit if it is higher than their own.
• The claiming spouse must be at least 62 and their partner must have filed for benefits.

Survivor Benefits:

• A widow(er) can collect up to 100% of the deceased spouse’s benefit.
• Benefits can start as early as age 60 (or 50 if disabled).

Pro Tip: A higher-earning spouse should consider delaying benefits until 70 to maximize survivor benefits for their partner.

The Impact of Working While Collecting Social Security

If you claim Social Security before FRA and continue working, your benefits may be temporarily reduced if you exceed income limits.

2025 Earnings Limitations:

• Before FRA: Benefits reduced by $1 for every $2 earned above $22,320.
• Year of FRA: Benefits reduced by $1 for every $3 earned above $59,520.
• After FRA: No reductions apply.

Strategy:

• If you plan to work in retirement, consider waiting until FRA to claim benefits to avoid penalties.

How to Minimize Taxes on Social Security Benefits

Up to 85% of Social Security benefits can be taxed if your income exceeds certain limits.

How to Reduce Taxes:

• Withdraw from Roth IRAs instead of taxable accounts.
• Use Qualified Charitable Distributions (QCDs) to reduce taxable income.
• Strategically withdraw funds from 401(k)s and IRAs before claiming Social Security.

Pro Tip: Work with a fiduciary financial advisor like TruNorth Advisors to create a tax-efficient withdrawal plan.

Divorce & Social Security: What You Need to Know

Divorced individuals may qualify for benefits based on their ex-spouse’s work history, provided:

• The marriage lasted at least 10 years.
• The ex-spouse is at least 62.
• The claiming spouse is unmarried.

Benefit Details:

• Ex-spousal benefits can be up to 50% of the ex-spouse’s FRA benefit.
• The ex-spouse does not need to file for you to claim.

Survivor Benefits for Divorced Spouses:

• A divorced widow(er) can claim 100% of an ex-spouse’s benefit if eligible.

Maximizing Social Security for Self-Employed Individuals

Self-employed workers often underreport income to reduce taxes, but this can lower their Social Security benefits.

Strategies for Self-Employed Workers:

• Pay yourself a reasonable salary to qualify for higher Social Security earnings.
• Maximize retirement contributions to offset tax burdens while still earning higher benefits.

Pro Tip: If you’re self-employed, meet with a financial advisor to balance tax savings and Social Security benefits.

Social Security & Inflation: Understanding Cost-of-Living Adjustments (COLA)

Social Security benefits include annual cost-of-living adjustments (COLA) to keep up with inflation.

2025 COLA Predictions:

• The COLA for 2025 is expected to be around 3-4%, based on economic trends.
• COLA adjustments ensure your benefits maintain purchasing power.

Key Takeaway:

Plan for inflation by investing in inflation-protected assets alongside your Social Security benefits.

Conclusion: Secure Your Retirement with TruNorth Advisors

Maximizing your Social Security benefits requires careful planning, timing, and tax strategies. By delaying benefits, optimizing spousal and surviving spouse options, and managing income tax efficiently, you can maximize your lifetime Social Security income, including your own retirement benefit.

At TruNorth Advisors, we specialize in helping retirees make smart, informed financial decisions. Our fiduciary team is dedicated to minimizing tax burdens, maximizing benefits, and ensuring a secure retirement.

Want to make the most of your Social Security benefits? Schedule a free consultation today and start planning for a secure retirement. Contact Us Today

Frequently Asked Questions

When is the best time to start taking Social Security benefits?

The best time to claim benefits depends on individual circumstances. Generally, waiting until your full retirement age (FRA) or later, particularly if considering changes effective in January, yields a higher benefit amount due to delayed retirement credits. However, the Bipartisan Budget Act of 2015, health, life expectancy, and immediate financial needs should also factor into your decision.

Can I work while receiving Social Security retirement benefits?

Yes, you can work while receiving Social Security retirement benefits. However, if you claim before your full retirement age and your paycheck exceeds a certain limit, your Social Security payments may be temporarily reduced and affect the taxability of your benefits. Your benefits are not impacted once you reach full retirement age.

How does divorce affect my Social Security benefits?

Divorce can impact Social Security benefits in the United States, particularly for spouses. A divorced spouse may be eligible for social security benefits based on their ex-spouse’s work history, even if the ex-spouse has remarried, subject to certain conditions.