Social Security and Retirement: Program Recap

Published July 9, 2026

Social Security is one part of retirement, yet it can be confusing on when to take your benefits and what benefits to take.

Thank you to Gerard Raho and Graham Kimmerer for an overview of Social Security and how that can fit into your retirement plan. For many people, they believe that Social Security can be their only, or a significant majority, of their income in retirement. However, it was never designed to be a sole source of retirement income; in fact, it should only compromise about 38% of your retirement income. Let’s take a closer look at the ins and outs of Social Security and how it can fit into our overall retirement strategy.

Social Security

Benefits and Calculations

In order to qualify for Social Security benefits, you must have worked and paid into Social Security for 40 quarters, or 10 years; those quarters or years do not have to be consecutive. Your overall benefit amount is an average of your 35 highest years of earnings; calculations are done to convert older years to adjust to current dollar amounts.

You can collect your full benefit amount once your reach your full retirement age. For those born in 1954 or earlier, your full retirement age is 66 and for those born in 1960 or later, your full retirement age is 67. For those both between 1955 and 1959, your full retirement age is slightly different. More information about when your full retirement age is can be found at https://www.ssa.gov/benefits/retirement/planner/agereduction.html.

Once you reach your full retirement age, you can collection your full benefit amount, but you can choose to start collecting benefits before or after your full retirement age, which will affect your benefit amount. You can start collecting Social Security at the age of 62, but the amount will be reduced up to 30%; if you wait until after your full retirement age, you can earn up to an extra 32% at age 70. If you wait until after age 70 to collect, you receive no additional benefits.

Once you claim your Social Security benefits, you can continue to work, but you may receive reduced benefits if you claim before your full retirement age and earn more than $2,040 per month in the year before your full retirement age and more then $5,430 in the year you reach full retirement age; the withholdings are $1 for every $2 above the earning limit for the first scenario and $1 for every $3 above for the second scenario. Those withholdings will eventually be paid back, but it can be spread out up to 12 years.

Types of Benefits

Spousal Benefits

Married individuals can claim spousal benefits based off of their spouse’s Social Security benefits, even if that spouse never worked. In order to claim those benefits, the non-claiming spouse must have first filed for benefits, even if that spouse is not claiming any benefits at this time. The maximum an individual can claim against their spouse is 50% of the spouse’s benefit at full retirement age. For example, if spouse 1 is claiming benefits against spouse 2 and spouse 2’s benefit at full retirement age is $4,000, the maximum spouse 1 can claim is $2,000. If spouse 1 tries to claim against spouse 2 before spouse 1’s full retirement age, that benefit will be reduced up to 32.5% if claimed at age 62.

A spouse can claim their own benefits as well as spousal benefits and the Social Security Administration but give them the higher amount. If spouse 1’s benefits are lower than half of spouse’s 2 benefits at full retirement age, spouse 1 can collect both theirs and their spouses to reach that 50% threshold of spouse 2’s benefit, assuming spouse 1 waits until full retirement age to collect.

Survivor Benefits

Widowed individuals can collection benefits against the decedent spouse starting at age 60, or age 50 if the surviving spouse is disabled. Survivor benefits are always calculated based on the decedent’s full retirement age, regardless of if the decedent died before their full retirement age, claimed before their full retirement age, or never claimed before death. If the surviving spouse attempts to claim the survivor benefit before reaching full retirement age, the benefit amount will be reduced up to 28.5%.

Divorcee and Remarriage Benefits

Individuals who are divorced or that have remarried, under certain conditions, can collect special benefits from a divorced spouse. If you were married for at least 10 years, divorced, and never remarried, you can still collect spousal benefits against the divorced spouse, as long as your own benefits is less than 50% of the divorced spouse’s benefit at full retirement age. This is true even if the divorced spouse remarries.

If you remarry before the age of 60, or 50 if disabled, you forfeit both the spousal and survivor benefit of your ex spouse. If you remarry after the age of 60, or 50 if disabled, you forfeit your spousal benefit of your ex spouse but can keep survivor benefit of the ex spouse only if that benefit is greater than your benefit as well as the spousal/survivor benefit for the current spouse.

Taxes and Social Security

Despite what is often referred to as “no tax on Social Security”, your Social Security benefits are part of the determination of your taxes in retirement. In retirement, your tax burden is defined by your combined income, which is a agglomeration of your adjusted gross income (earned income from wages or non-Roth disbursements), tax-exempt income (eg. savings), and up to 85% of your yearly Social Security benefit depending on your benefit amount and your filing status.

For those filing individually, if your Social Security yearly benefit is less than $25,000, you benefits are not taxable; if you benefits are between $25,000 and $34,000 or over $34,000, you can be taxed up to 50% or 85% respectively. Those amounts increase for those filing jointly to less than $32,000 for not taxable, $32,000 to $44,000 for up to 50%, and over $44,000 for up to 85%.

Social Security and Retirement

Social Security should be one component of your retirement strategy and determining when to claim your benefits and what benefits to take will be different for each person. Your desire and ability to work, retirement accounts, annuities, life insurance, and hosts of other income streams along with your financial goals will all help determine overall retirement strategy. Before making any decisions, it is recommended to speak with a financial professional to develop a plan to ensure you can meet all of your financial goals in retirement. To learn more about your Social Security benefits, please visit https://www.ssa.gov/; you will need to create an account to view your free benefits statement.

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