What retirees need to know before claiming

Social Security decisions made at retirement are hard to undo. Once you claim, your monthly payment is locked in based on your age and earnings record. If you claim at 62, your payment is roughly 30 percent lower than if you wait until 67. If you wait until 70, it is roughly 24 percent higher than at 67. The Social Security Administration (SSA) will not let you restart your claim to get a higher payment — you can only do that once in your lifetime, and only within the first 12 months after you start receiving benefits.

The most common mistake is claiming too early without understanding the long-term cost. A person who claims at 62 and lives to 80 receives less total money than someone who waits until 67 and lives to 80, even though the early claimer got payments for five extra years. The break-even point is usually around age 80 to 82. If you have reason to believe you will live past 80 — good health, family history, or simply uncertainty — waiting usually means more money over your lifetime.

A second major mistake is not checking your earnings record before you claim. The SSA uses your 35 highest-earning years to calculate your benefit. If you worked part-time early in your career, had gaps in employment, or changed names without notifying SSA, your record may be wrong. You can view your record free at ssa.gov/myaccount. If you find errors, you must report them with documents like W-2s or tax returns — SSA will not correct them without proof.

Key Takeaways

  • Claiming Social Security before your full retirement age (66 or 67 depending on birth year) permanently reduces your monthly payment by roughly 6 to 7 percent for each year you claim early.
  • You can only undo a Social Security claim once, and only within 12 months of starting to receive benefits — after that, the decision is permanent.
  • Your Social Security payment is based on your 35 highest-earning years, so errors in your earnings record directly lower your benefit amount.
  • If you are still working when you claim before full retirement age, SSA will withhold $1 in benefits for every $2 you earn above an annual limit (the limit changes yearly).
  • Married couples and divorced people have different claiming strategies that can increase household benefits, but only if you understand the rules before you claim.

How work after claiming affects your payment

If you claim Social Security before your full retirement age and continue working, SSA withholds money from your benefits. For 2024, if you earn more than $23,400 per year, SSA deducts $1 in benefits for every $2 you earn above that amount. The year you reach full retirement age, the limit is higher ($62,160 for earnings before the month you reach full retirement age), and SSA only counts earnings in months before you turn full retirement age.

This withholding is temporary — once you reach full retirement age, SSA stops withholding and recalculates your benefit upward to account for the months they withheld. But the immediate cash flow hit can be severe. A person claiming at 62 who earns $40,000 per year would have $8,300 withheld in the first year alone. Many retirees do not realize this rule exists until they have already claimed and started working.

The income limit changes every year based on wage growth. You can find the current year's limit on ssa.gov. If you are thinking about working after you claim, contact SSA before you start to understand exactly how much you will receive in your first year.

Mistakes with spouse and ex-spouse benefits

If you are married, your spouse may be may have access to to a benefit based on your earnings record — up to 50 percent of your full retirement age benefit amount. If your spouse has not worked or has a low earnings record, this can be a significant amount. But your spouse must wait until their full retirement age to receive the full 50 percent. If they claim early, their payment is reduced, just like yours would be.

A common error is not realizing that your spouse's benefit is tied to when you claim. If you claim at 62, your spouse's maximum benefit is also reduced, even if your spouse waits until full retirement age to claim. The reduction is permanent. If you wait until 70 to claim, your spouse's maximum benefit is higher.

If you are divorced and were married for at least 10 years, you may be may have access to to a benefit based on your ex-spouse's record without their knowledge or permission. You do not need to be in contact with them. However, you must be at least 62 years old and unmarried. If you remarry, you lose this benefit unless the new marriage happens after you turn 60. Many divorced people do not know this option exists and miss out on thousands of dollars.

Taxes on Social Security benefits

Social Security benefits are not automatically tax-free. If you have other income — from a job, a pension, investments, or retirement account withdrawals — part of your Social Security may be taxable. The SSA uses a formula based on your "combined income," which includes half of your Social Security benefits plus all other income.

If your combined income is between $25,000 and $34,000 (single) or $32,000 and $44,000 (married filing jointly), up to 50 percent of your benefits may be taxable. If your combined income is above those thresholds, up to 85 percent of your benefits may be taxable. Many retirees are surprised to owe federal income tax on benefits they thought were tax-free.

You can reduce your tax bill by managing the timing of other income. For example, delaying a large retirement account withdrawal or spreading it over multiple years can lower your combined income and reduce the portion of Social Security that is taxable. A tax professional or CPA can model different scenarios before you claim.

Reporting changes to Social Security

After you start receiving benefits, you must report certain life changes to SSA. If you return to work, get married, get divorced, move out of the country, or have a significant change in income, you should contact SSA. Some changes affect your benefit amount; others affect your may be able to access.

You can report changes online at ssa.gov/myaccount, by phone at 1-800-772-1213, or in person at your local Social Security office. Keep records of what you reported and when. If SSA overpays you because you did not report a change, you will be asked to repay the money — even if the overpayment was SSA's error in calculating it.

One often-missed requirement: if you leave the United States for more than six months, you must notify SSA. Depending on your citizenship status, your benefits may be suspended while you are abroad. Some countries have agreements with the U.S. that allow benefits to continue; others do not. If you plan to travel or move internationally, contact SSA before you go.

How to verify your earnings record before claiming

Your Social Security benefit is calculated from your 35 highest-earning years. If your record has errors — a missing year, a year with too-low earnings, or earnings credited to the wrong person — your benefit will be lower than it should be. You can check your record free at ssa.gov/myaccount by creating an account with your Social Security number, email, and identity verification.

Once you log in, you will see a year-by-year breakdown of earnings SSA has on file. Compare it to your tax returns and W-2s. If you see a discrepancy, gather the documents that prove the correct amount — W-2s, tax returns, or pay stubs — and contact SSA. You can report errors online, by phone, or in person. SSA will investigate and correct the record if your documents support the correction.

Do this at least three to six months before you plan to claim. If SSA finds errors, they will recalculate your benefit. If you have already claimed and then discover an error, you can still report it, but SSA will only pay you the difference going forward, not retroactively.

Frequently Asked Questions

Can I change my mind after I start receiving Social Security?

You can withdraw your claim and restart it once in your lifetime, but only within 12 months of when you first started receiving benefits. You must repay all benefits you received during that time. After 12 months, your claim is permanent and cannot be changed. This is why it is critical to understand the long-term impact before you claim.

What happens to my Social Security if I move to another country?

It depends on your citizenship and the country you move to. U.S. citizens can receive benefits in most countries. Non-citizens may have restrictions. You must notify SSA before you leave the U.S. for more than six months. Some countries have no agreement with the U.S., and benefits are suspended while you live there. Contact SSA before you move to find out whether your benefits will continue.

If I delay claiming until 70, do I get a lump sum for the years I did not claim?

No. Social Security does not pay a lump sum for delayed years. Instead, your monthly payment is permanently higher — roughly 8 percent higher for each year you delay past full retirement age. The higher payment continues for the rest of your life and, in some cases, for your surviving spouse.

How do I know if my ex-spouse's benefit would be higher than my own?

You can contact SSA and ask them to estimate both amounts. You must have been married for at least 10 years, be at least 62 years old, and be unmarried. SSA will compare your own benefit to the ex-spouse benefit and pay you whichever is higher. You do not have to choose — SSA automatically pays the larger amount.

What if SSA made an error and overpaid me?

SSA will ask you to repay the overpayment. You can request a waiver if you did not cause the error and repaying would cause financial hardship, but waivers are not automatic. If you disagree with the overpayment amount, you can request an appeal. Contact SSA as soon as you learn of an overpayment to discuss your options.