The Art and Science of Timing Social Security

Social Security has been a cornerstone of retirement security in the United States for nearly a century. Signed into law by President Franklin D. Roosevelt in 1935 during the Great Depression, the Social Security Act was designed to provide financial stability for older Americans who could no longer work and protection for the disabled and survivors of deceased workers. Today, it remains one of retirees’ most important income sources, supplementing personal savings and pensions.

However, while Social Security benefits are nearly universal, how and when you choose to claim them is anything but straightforward. The timing of your claim can significantly affect the size of your monthly check, the total lifetime benefits you receive, and how effectively Social Security integrates with your broader wealth management plan.

What Social Security Provides

Social Security is more than just retirement income. It also provides disability insurance and survivor benefits, ensuring families receive support during challenging times. For retirees, however, the key question is how to maximize monthly benefits while balancing other financial resources.

New Updates: The One Big Beautiful Bill Act

The recently passed One Big Beautiful Bill Act made updates that affect Social Security planning:

• Enhanced deduction for taxpayers age 65+
  Starting in tax year 2025 (and effective through 2028), taxpayers age 65 or older may claim an additional deduction of up to $6,000 (single) or $12,000 (married filing jointly) via OBBBA.^{1, 2, 3}
  • This deduction is available even if the taxpayer chooses to itemize.^4,5
  • The deduction phases out for single filers with a modified adjusted gross income (MAGI) above $75,000 (and $150,000 for joint filers).^6,7
• Indirect reduction in taxes on Social Security benefits
  While the law did not change the tax thresholds for Social Security benefit taxation, the enhanced deduction means that many seniors will have zero federal income tax liability on their Social Security benefits, because the deduction lowers their taxable income.
  • The Social Security Administration noted this provision “eliminates federal income taxes on Social Security benefits for most beneficiaries” through the deduction mechanism.⁸
  • Various law firms and elder-law advisors note that under the new deduction, “approximately 90% of beneficiaries will see zero taxation of those benefits” (i.e., effectively tax-free) in many cases.⁹

Key Dates and Ages to Know

Timing Social Security requires a careful understanding of key milestones:

• Age 62: Typically, the earliest age to claim retirement benefits, though they will be permanently reduced.
  • For survivor benefits, a surviving spouse can claim reduced benefits as early as age 60, or as early as age 50 if they have a qualifying disability.
• Full Retirement Age (FRA): FRA falls between 66 and 67, depending on your birth year. At FRA, you receive 100% of your earned benefit.
• Age 70: The latest age to delay benefits. Waiting until 70 increases your monthly check thanks to delayed retirement credits.
• Annual COLA Updates: Announced each fall, COLA adjustments help maintain purchasing power.

How to Claim Social Security

Claiming Social Security is relatively straightforward, though the decision behind when to claim is not:

1. Review Your Statement: The Social Security Administration provides an annual statement that shows your estimated benefits at various ages.
2. Apply Online, By Phone, or In Person: Applications can be completed through the SSA website, by phone, or in person at your local office.
3. Gather Key Documents: Be prepared with proof of age, work history, tax records, and marriage or divorce documents, if applicable.
4. Coordinate with Other Income Sources: Your Social Security strategy should work with retirement accounts, pensions, and investments to provide stability and tax efficiency.

Balancing Social Security with Wealth Management

Deciding when and how to claim Social Security isn’t just about maximizing the monthly check; it’s about creating a retirement income strategy that supports your lifestyle, protects your family, and aligns with your long-term financial goals. The art lies in balancing guaranteed income with investment flexibility. The science lies in the numbers: life expectancy, tax efficiency, and portfolio performance.

At Sequoia Financial Group, our advisors can help you navigate both. By modeling different claiming strategies and coordinating them with your broader wealth plan, we can help you maximize the benefits of your Social Security benefits without leaving the rest of your financial life to chance.

Work with your Sequoia Financial Group advisor to find the right balance of Social Security and wealth management, so your retirement is built on a solid, personalized foundation.

Sources:

1. 1. https://taxfoundation.org/research/all/federal/one-big-beautiful-bill-act-tax-changes/
   2. https://www.bankerslife.com/insights/personal-finance/5-things-to-know-about-the-big-beautiful-bill-for-seniors/
   3. https://tax.thomsonreuters.com/blog/breaking-down-the-obbbas-social-security-tax-deduction/
   4. https://bipartisanpolicy.org/explainer/the-2025-tax-bill-additional-6000-deduction-for-seniors-simplified/
   5. https://taxfoundation.org/research/all/federal/one-big-beautiful-bill-act-tax-changes/
   6. https://taxfoundation.org/research/all/federal/one-big-beautiful-bill-act-tax-changes/
   7. https://bipartisanpolicy.org/explainer/the-2025-tax-bill-additional-6000-deduction-for-seniors-simplified/
   8. https://blog.ssa.gov/social-security-applauds-passage-of-legislation-providing-historic-tax-relief-for-seniors/
   9. https://www.paolilaw.com/library/how-the-one-big-beautiful-bill-act-affects-social-security.cfm