INDIANA – As more Americans approach retirement age, understanding when and how to claim Social Security benefits remains a critical financial decision, according to guidance from the AMAC Foundation.
In a recent advisory column, Russell Gloor, a National Social Security Advisor with the foundation, responded to a reader planning to begin collecting benefits at age 62, the earliest age of eligibility under the Social Security Administration.
Gloor emphasized that while claiming early may be appealing, it comes with long-term financial trade-offs. Individuals who choose to begin benefits at 62 will receive a reduced monthly payment — about 70% of what they would collect by waiting until full retirement age, which is 67 for most current workers.
“There are important details to consider before making that decision,” Gloor noted, pointing to several factors that can significantly affect long-term income.
One key consideration is continued employment. Those who claim benefits before reaching full retirement age and continue working are subject to the Annual Earnings Test, which limits how much income they can earn without reducing their Social Security payments. For 2026, that earnings cap is set at $24,480. Benefits are reduced by $1 for every $2 earned above that threshold, and in some cases, benefits may be temporarily withheld if earnings are significantly higher.
Gloor also stressed that early claiming results in a permanent reduction in monthly benefits. While annual cost-of-living adjustments — commonly referred to as COLA — can increase payments over time, they are applied to the reduced base amount. Historically, COLA increases have averaged about 2.5% annually.
Marital status is another important factor. For married individuals, the amount received at the time of death can affect survivor benefits for a spouse. Claiming early may result in a lower benefit for a surviving spouse, while delaying benefits could provide greater long-term financial security for both partners.
On the other hand, delaying benefits beyond age 62 increases monthly payments. Benefits grow by roughly 6% per year until full retirement age and can increase by about 8% annually for each year benefits are delayed beyond that, up to age 70. By waiting until age 70, recipients can receive significantly higher monthly payments compared to claiming at 62.
Gloor encourages individuals to review their personal earnings record and estimated benefits through a “my Social Security” account on the Social Security Administration’s website. Doing so can help future retirees better understand how different claiming ages impact their monthly income.
Ultimately, the decision of when to claim Social Security should be based on individual circumstances, including financial needs, health, expected longevity, work plans, and family considerations, Gloor said.
“Careful planning now can make a meaningful difference in long-term retirement security,” he noted.
