What You Should Know Before Claiming Social Security Benefits

Andy Hammond, AAF Wealth Management, shares insights from recent client conversations.

Lately, I’ve been hearing from more and more clients—especially those in their early to mid-60s—who are starting to think seriously about retirement. One of the biggest questions on their minds? When to start claiming Social Security. It’s a decision packed with financial implications, and understandably, it’s something we talk about often.

If you’re approaching retirement, this is one of the most important choices you’ll make. There’s a lot to weigh, and the stakes are high. So let’s break it down together.

Is Social Security Running Out of Money?

According to the SSA’s 2025 Annual Trustees Report:

• The Old-Age and Survivors Insurance (OASI) Trust Fund is projected to be able to pay 100% of scheduled benefits until 2033. After that, it will only be able to pay 77% of scheduled benefits from ongoing income.
• The Disability Insurance (DI) Trust Fund is projected to remain solvent through at least 2099, the end of the report’s projection period.
• If the OASI and DI Trust Funds are considered together (referred to as OASDI), the combined reserves are projected to be depleted by 2034, at which point 81% of scheduled benefits could still be paid from continuing income.

This means that while the trust funds are facing long-term financial challenges, Social Security is not running out of money entirely. Even if Congress does not act before the projected depletion dates, the program will still have enough income to pay a substantial portion of benefits—over 80% in the case of the combined funds.

So, while adjustments may be needed, the program remains a vital part of retirement planning.

When Can You Claim?

About one in four retirees rely on Social Security as their primary income. That makes the timing of your claim a critical decision. Whether you’re planning to retire early or work a few more years, understanding your options can help you make the most of your benefits.

You may start claiming Social Security any time between ages 62 and 70. Most people reach “full retirement age” at 67. Claiming before that age means reduced monthly benefits, while waiting can increase your payout.

Here’s how it works:

• Claiming at 62 can reduce your monthly benefit by up to 30%.
• Each month you wait after 62, the reduction shrinks.
• If you delay past full retirement age, your benefit increases by about 8% per year—up to 24% more if you wait until 70.

What’s the Break-Even Point?

The break-even age—the point where waiting starts to pay off—is around 79. If you expect to live longer than that, delaying may be the better financial move. But if you have health concerns or a shorter life expectancy, claiming earlier could make more sense.

Key Factors to Consider

Here are a few things we help clients think through:

• Financial need: Do you need the income now, or can you afford to wait?
• Health and longevity: Your family history and personal health matter.
• Spousal strategies: Coordinating with your spouse or significant other can unlock additional benefits.
• Market conditions: In strong markets, delaying may be easier. In downturns, claiming early can reduce pressure on your investments.

The decision is personal, unique, and in some cases, a work in progress… At AAF Wealth Management, we use advanced financial planning software to model different scenarios based on reasonable assumptions. These tools help us show you the potential long-term impact of your choices in a clear, personalized way.

New Tax Deduction for Beneficiaries

A recent legislative change introduced a $6,000 deduction for Social Security beneficiaries. It’s a welcome benefit, though it phases out for higher-income individuals. You can read more about it in our blog. >>

How we help

Deciding when to claim Social Security is a pivotal, and often irrevocable, choice that can significantly influence your long-term retirement income. At AAF Wealth Management, we emphasize personalized financial planning tailored to your unique circumstances. We take the time to understand your goals, health considerations, and overall financial picture to help you make a well-informed decision that supports your retirement vision.

These insights were contributed by Andrew Hammond, CFP®, Co-Managing Partner & Wealth Advisor, AAF Wealth Management.

Questions? Reach out to our authors directly or your AAFCPAs partner.

AAFCPAs offers a wealth of resources on wealth preservation. Subscribe to get alerts and insights in your inbox.

*This content is intended for informational purposes only and should not be construed as personalized investment, tax, or legal advice. AAF Wealth Management recommends that individuals consult with a qualified advisor regarding their unique circumstances before making financial decisions. Social Security rules and tax laws are subject to change, and the impact of claiming strategies may vary based on individual factors.