Collecting Social Security Benefits – There are Choices

In 1935, Social Security was established through the Social Security Act.  It was the first federal involvement of financial support to retirees. 

The Social Security program is based on contributions made by workers throughout their employment years.  Employees pay into the Social Security program through mandatory withholding of Federal Insurance Contributions Act (FICA) taxes.

Social Security is America's largest pension plan.  It is probably the most misunderstood and underutilized plan.

If you are between the ages of 59-66, be sure to attend one of the National Institute of Financial Education seminars listed on our events Calendar page.


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Research has shown that many Social Security retirement benefits recipients receive less income than they are entitled to receive.

The Social Security retirement benefits you are eligible to receive annually can vary by thousands of dollars.  We educate our clients on how to plan and maximize their Social Security Benefits.

Social Security payments can be optimized by developing a strategy that includes when to apply for benefits and how to coordinate them with other financial resources.

How Much Will I Receive at Retirement?

Social Security benefits are based on your lifetime earnings.  Your actual earnings are adjusted to account for any changes in average wages from the time you began earning.  Social Security calculates your benefits based on your average indexed monthly earnings during the 35 years in which you had your highest earnings.   When taken at full retirement age (see Full Retirement Age below), the amount you receive is your “Primary Insurance Amount” (PIA). 

Even though the program has been around for nearly 80 years, most people do not understand that choosing how and when to begin collecting benefits is one of the largest financial decisions a person can make in his or her lifetime.  It is a complicated decision, and all options should be explored. 

The Social Security Administration is not allowed to provide advice on how and when to collect.  Therefore, by working with a trusted financial advisor to review all options, costly mistakes can be avoided.

What is Full Retirement Age?

In 1983, there was an overhaul made to improve the solvency of the Social Security system.  Age 65 was originally considered full retirement age. The new law stated that individuals born after 1937 had a new full retirement age.

Full Retirement Age

Year of Birth

Full Retirement Age

1937 and earlier



65 and 2 months


65 and 4 months


65 and 6 months


65 and 8 months


65 and 10 months




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 and later




May I Collect Benefits Early?

You may begin receiving your Social Security benefits as early as age 62.  However, the amount of your benefits will be reduced by one-half of one percent for each month you start collecting before your full retirement age.  In other words, if your full retirement age is 66 (born between 1943 and 1954), and you elect to receive your benefits at age 62, you will only receive 75% of your PIA. 

How would that reduction affect you over your lifetime?

May I Delay Taking My Benefits?

Delaying receipt of benefits beyond your full retirement age is another option.  By doing so, your benefit will be increased by a certain percentage depending on the year you were born.  The increase will be added automatically each month from the time you reach full retirement age until you start taking benefits, or you reach age 70, whichever comes first.

How would the increased amount affect you over your lifetime?

On November 2, 2015 the BiPartisan Budget Act of 2015 was signed into law. Social Security benefits options for retiring individuals have been extensively changed. Notably, married couples in which one or both spouses were born on or after May 1, 1950 have been affected. Click here for a summary of the changes.

Can I Collect Benefits Based on my Spouse’s PIA?

If you are married, you may be able to claim Social Security benefits based on your own work history, or you can collect a “spousal benefit.” Your spousal benefit equals 50% of your spouse’s Social Security benefit.  If you are eligible for both your own or a spousal benefit, you will receive the higher amount.

Here are few important points on collecting spousal benefits:

  • Your spouse must file for benefits.

  • You must be at least age 62 to qualify for benefits.

  • The maximum benefit at full retirement age is 50% of your spouse’s benefit.

  • If you claim a benefit before full retirement age, that benefit will be permanently reduced.

  • At your full retirement age you have an additional option of receiving the spousal benefit and delaying receipt of your own benefit.  This will allow your benefit to increase until you start taking the benefits (see May I Delay Taking My Benefits?).

What if My Spouse is Deceased?

If you are a widow or widower, you may begin receiving survivor benefits between age 60 and full retirement age.  By beginning prior to full retirement age your benefits will be reduced.

If you are over full retirement age, your benefit will be 100% of your deceased spouse’s benefit at the time the spouse elected to begin. 

If you choose to receive a widow’s or widower’s benefit and will also qualify for your own retirement benefits that are more than your survivor’s benefit, you can switch to your own retirement benefit any time between age 62 and age 70.

What if I am Divorced?

If you are divorced, but your marriage lasted at least 10 years, you have the option of receiving Social Security benefits on your ex-spouse’s record (even if he or she has remarried).  During the first and second years after divorce, you may only apply for divorced spouse benefits if your ex-spouse has already applied for benefits.  After two years you may apply for benefits regardless of whether your ex-spouse has applied for benefits.  You must be at least 62 and unmarried.

If you choose to receive divorced spousal benefits but are also eligible for your own retirement benefits, you can delay taking your own benefit until after full retirement age, allowing it to increase and receive a higher income at a later date.

Are Social Security Benefits Taxed?

If you have taxable income that is greater than $25,000 (single, head of household, qualifying widower, married filing separately and lived apart the entire year) or $32,000 (Married-couple filing jointly), some portion of your Social Security benefit will be taxed.

To lessen the tax burden, an overall evaluation of your financial situation to lessen the taxable income would be warranted. 

What if I need help evaluating my options?

The Social Security Administration is precluded from providing advice about your options.  If you have not started receiving retirement benefits or have been receiving them for less than one year and you would like to evaluate all of your options, please call 941.361.3075 x4 or email for a free, no obligation consultation.

We also work with the National Institute of Financial Education, 501(c)3 organization in presenting an educational workshop to retiring individuals age 59-66. Contact us at 941.361.3057 x9 or email if you'd like us to make a presentation to your special interest group, or check our calendar for our upcoming public seminars.



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