Social Security Claiming Strategies:
When to Start Your Benefits
We Serve people in Scottsdale, AZ, Brookfield & Johnson Creek Wisconsin
Social Security Claiming Strategies
Deciding when to claim Social Security is one of the most important financial decisions you’ll make in retirement.
The timing of your claim can mean the difference between thousands—or even tens of thousands—of dollars over your lifetime.
Whether you’re considering claiming early at 62, waiting until your full retirement age, or delaying until 70 for maximum benefits, the right strategy depends on your unique situation.
Your health, financial needs, marital status, and life expectancy all play crucial roles in determining the best approach.
At Family Wealth Advisors, our team in Scottsdale, Arizona, Brookfield, and Johnson Creek, Wisconsin understands that no two claiming strategies are alike.
We help you navigate these complex decisions while considering important factors like state taxes—Arizona doesn’t tax Social Security benefits while Wisconsin does—and how your claiming decision affects Medicare enrollment and other retirement income.
Understanding How Social Security Benefits Work
Before diving into claiming strategies, it’s helpful to understand how Social Security calculates your benefits and why timing matters so much.
How Your Benefits Are Calculated
Your Social Security benefit is based on your Primary Insurance Amount (PIA), which comes from your 35 highest-earning years of work.
The Social Security Administration adjusts these earnings for inflation and applies a formula that replaces different percentages of your income.
Here’s how claiming age affects your benefits:
- Early claiming (before full retirement age): Your benefits are permanently reduced by about 6-7% for each year you claim early
- Full retirement age: You receive 100% of your calculated benefit
- Delayed claiming (after full retirement age): Your benefits increase by 8% for each year you delay, up to age 70
Understanding these calculations helps you see why timing can have such a dramatic impact on your lifetime Social Security income.
What Full Retirement Age Means for You
Your full retirement age (FRA) depends on when you were born. For most people planning retirement today, it’s somewhere between 66 and 67 years old.
Impact of claiming at different ages:
| Claiming Age | Benefit Amount |
|---|---|
| 62 | 75% of full benefit |
| Full Retirement Age | 100% of full benefit |
| 70 | 124-132% of full benefit |
This table shows why the decision of when to claim isn’t just about getting money sooner versus later—it’s about how much money you’ll receive each month for the rest of your life.
Strategic Timing for Your Social Security Claims
The “right” time to claim Social Security varies dramatically from person to person.
Let’s explore the main strategies and when each might make sense.
Early Claiming at Age 62: When It Makes Sense
Claiming at 62 means accepting a permanent reduction in your monthly benefits—typically 25-30% less than you’d receive at full retirement age.
But sometimes this strategy makes perfect sense.
Consider early claiming if:
- You need the income and don’t have other sources
- You have serious health concerns that might affect your life expectancy
- You want to use Social Security to bridge the gap until other retirement accounts become available
- You’re planning to continue working and can benefit from the cash flow
Remember that if you’re still working, your benefits might be temporarily reduced if you earn over certain thresholds, but you’ll get those reductions back after you reach full retirement age.
Waiting Until Age 70: Maximizing Your Benefits
Delaying your Social Security claim until age 70 can increase your monthly benefit by 24-32% compared to claiming at full retirement age.
This strategy can be particularly powerful if you expect to live a long time in retirement.
Delaying makes sense when:
- You’re in good health and have longevity in your family
- You have other income sources to support you until age 70
- You want to maximize the survivor benefit for your spouse
- You’re still working and earning a good income
The increased monthly payment from delaying can provide significantly more financial security as you age, especially when healthcare costs tend to rise.
Break-Even Analysis: Making the Math Work for You
A break-even analysis helps you understand how long you need to live for delaying benefits to pay off financially.
While this might seem morbid, it’s a practical tool for decision-making.
For example: If claiming at 62 gives you $1,500 per month, but waiting until 70 gives you $2,200 per month, you need to live about 12-14 years after age 70 for the delay strategy to provide more total lifetime benefits.
However, break-even analysis isn’t just about the math. Consider factors like inflation protection (delayed benefits grow with cost-of-living adjustments on a higher base), your need for predictable income, and the value of having larger benefits later in retirement when you might have higher healthcare costs.
Advanced Strategies for Couples
Married couples have more complex—but potentially more rewarding—Social Security strategies available.
Coordination between spouses can significantly boost total household Social Security income.
Coordinating Spousal Claims
One effective strategy for couples is to stagger your claims.
For example, the spouse with lower lifetime earnings might claim early to provide household income, while the higher-earning spouse delays until age 70 to maximize their benefit.
This approach offers several advantages:
- Immediate income from one spouse’s benefits
- Maximum delayed retirement credits on the higher earner’s benefit
- A higher survivor benefit for the surviving spouse
The key is analyzing both spouses’ benefit amounts, health situations, and overall financial needs to determine the optimal timing for each person.
Benefits for Divorced Spouses
If you’re divorced, you might be eligible for benefits based on your ex-spouse’s work record—without affecting their benefits at all.
You can claim these benefits as early as age 62 or delay until age 70, just like with your own benefits.
Requirements for divorced spouse benefits:
- You were married for at least 10 years
- You’re currently unmarried
- Your ex-spouse is eligible for Social Security (they don’t have to be claiming yet)
This can be particularly valuable if your ex-spouse had significantly higher earnings than you did during your career.
Survivor Benefit Planning
Planning for survivor benefits is crucial for married couples.
When one spouse dies, the surviving spouse can keep the higher of the two Social Security benefits—but not both.
This is why maximizing the higher earner’s benefit through delayed claiming can be so important.
That larger benefit becomes the survivor benefit, providing better financial security for the surviving spouse.
Survivor benefit considerations:
In some cases, it makes sense to claim survivor benefits early and let your own benefits grow until age 70
Survivors can claim reduced benefits as early as age 60
Waiting until full retirement age provides the full survivor benefit
State Tax Implications: Arizona vs. Wisconsin
Where you live in retirement can significantly affect how much of your Social Security benefits you actually keep.
The difference between Arizona and Wisconsin tax treatment is substantial.
Arizona’s Tax-Friendly Approach
Arizona is one of the states that doesn’t tax Social Security benefits at all.
This means every dollar you receive from Social Security stays in your pocket, regardless of your other income.
Benefits for Arizona residents:
- No state tax on Social Security benefits
- More flexibility in retirement income planning
- Ability to focus on federal tax optimization without state complications
This tax advantage can make early claiming more attractive for Arizona residents, since you won’t lose any of your benefits to state taxes.
Wisconsin’s Tax Considerations
Wisconsin does tax Social Security benefits, but the impact depends on your total income.
Understanding these rules can help you plan more effectively.
Wisconsin’s approach:
- Single filers with adjusted gross income over $75,000 pay full state tax on Social Security
- Those below certain thresholds may qualify for partial or complete exemptions
- State tax rates range from 3.1% to 5.7%
For Wisconsin residents, coordinating Social Security claims with other retirement income sources becomes more important to manage your overall tax burden effectively.
Coordinating with Medicare and Other Retirement Planning
Your Social Security claiming decision doesn’t happen in a vacuum—it needs to coordinate with Medicare enrollment and your other retirement income sources.
Medicare Enrollment Timing
Medicare eligibility begins at age 65, regardless of when you claim Social Security.
However, if you’re already receiving Social Security when you turn 65, you’ll be automatically enrolled in Medicare Parts A and B.
Important coordination points:
- If you delay Social Security past 65, you still need to enroll in Medicare manually
- Late Medicare enrollment can result in permanent premium penalties
- Higher Social Security benefits might push you into higher Medicare premium brackets (IRMAA)
We help our clients navigate these decisions to avoid costly mistakes and ensure seamless healthcare coverage.
Integrating with Other Retirement Income
Your Social Security claiming strategy should coordinate with withdrawals from 401(k)s, IRAs, and other retirement accounts.
The goal is to create a tax-efficient income stream throughout retirement.
Integration strategies include:
- Using other retirement savings to bridge income needs if delaying Social Security
- Coordinating taxable and tax-free account withdrawals with Social Security timing
- Planning Roth conversions during lower-income years before claiming Social Security
This comprehensive approach helps minimize your lifetime tax burden while maximizing your retirement security.
Your Local Social Security Claiming Experts
Our advisors in Arizona and Wisconsin bring deep expertise in Social Security planning, combined with understanding of local tax implications and retirement considerations.
Scottsdale Team: Jeffrey J. Biro and W. Ryan Zenk
Jeffrey J. Biro specializes in comprehensive retirement planning with a focus on optimizing Social Security benefits for Arizona residents.
He helps clients understand how Arizona’s tax-friendly environment affects their claiming strategies and overall retirement planning.
W. Ryan Zenk brings expertise in fiduciary financial planning, ensuring that all Social Security recommendations are made solely in clients’ best interests.
He’s particularly skilled at coordinating complex spousal claiming strategies and analyzing break-even scenarios for couples.
Together, they provide Scottsdale families with personalized Social Security strategies that integrate seamlessly with comprehensive retirement planning.
Brookfield Expertise: W. Ryan Zenk
In Brookfield, W. Ryan Zenk applies his extensive Social Security knowledge to help Wisconsin residents navigate the state’s tax implications while maximizing their federal benefits.
Ryan’s approach considers Wisconsin’s unique tax treatment of Social Security benefits, helping clients structure their overall retirement income to minimize tax burden while ensuring adequate cash flow throughout retirement.
Johnson Creek Guidance: Michael Wendt
Michael Wendt provides personalized Social Security planning for Johnson Creek residents, with particular expertise in coordinating benefits for rural and small-town retirees.
Michael’s detailed analysis helps clients understand how their Social Security decisions affect their overall financial security, taking into account local cost-of-living factors and the specific needs of Wisconsin retirees.
Frequently Asked Questions
Here are answers to the most common questions about Social Security claiming strategies.
What are the main advantages and disadvantages of claiming Social Security at 62?
Claiming at 62 provides immediate income and guarantees you’ll receive benefits, but permanently reduces your monthly payment by 25-30%. This strategy works best if you need the income immediately, have health concerns, or want to use Social Security to bridge other retirement planning gaps.
How should married couples coordinate their Social Security claiming strategies?
Couples often benefit from staggered claiming strategies—one spouse might claim early for immediate household income while the other delays to maximize delayed retirement credits. The optimal approach depends on each spouse’s earnings history, health, and your household’s financial needs.
What factors should I consider in a break-even analysis for Social Security timing?
Consider your life expectancy, current health, family longevity history, financial needs, and other income sources. Also factor in inflation protection (delayed benefits grow on a higher base) and the value of larger benefits later in retirement when expenses might be higher.
How do Arizona and Wisconsin’s different tax treatments affect claiming strategies?
Arizona’s tax-free treatment of Social Security benefits makes early claiming more attractive since you keep 100% of your benefits. Wisconsin’s taxation of benefits above certain income thresholds requires more careful coordination with other retirement income to minimize overall tax burden.
How does Medicare enrollment timing relate to Social Security claiming decisions?
Medicare begins at 65 regardless of Social Security timing. If you’re receiving Social Security, you’ll be automatically enrolled. If you delay Social Security past 65, you must enroll in Medicare manually to avoid penalties. Higher Social Security benefits might also increase your Medicare premiums.
Can divorced individuals benefit from their ex-spouse’s Social Security record?
Yes, if you were married for at least 10 years and are currently unmarried, you can claim benefits based on your ex-spouse’s record. These claims don’t reduce your ex-spouse’s benefits, and you can use the same timing strategies (claiming early, at full retirement age, or delaying until 70).
Why Choose FWA
The FWA Team
Meet the Advisors Who Put Your Interests First
Jeffrey J. Biro, CEP, RFC
President
W. Ryan Zenk, JD, CFP®
Chief Executive Officer
John Oxenhandler
VP of Investment Operations
Mike Wendt
Registered Representative
Debbie Basom
New Client Services Director
