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When to File for Social Security Benefits

by | Jul 11, 2023

Our prior articles have focused on the benefits available through Social Security. This article will discuss important factors to consider about when to file for benefits: work, taxes, and longevity.

Working While Receiving Benefits

If you plan to work while collecting Social Security (on your own record, on your spouse’s, or for widow’s benefits), your income may cause some of your benefits to be withheld if you start collecting before full retirement age or in the year you reach full retirement age. The withheld benefits aren’t entirely lost, but they aren’t paid in a lump sum at FRA. AARP does a good job explaining the repayment process and gives an example here.

Taxation of Social Security Benefits

The portion of Social Security income that is taxable varies with each individual and is dependent on your adjusted gross income and the amount of Social Security benefits you receive. At most, 85% of your Social Security benefit will be taxed, making it one of the more tax-efficient sources of income for retirees. While taxes aren’t the only consideration on when to file, they do play an important role in how your overall retirement income planning should be constructed.


Many retirees worry they will not live long enough to reap the benefits of Social Security if they delay filing. So, they file early and permanently reduce their benefits. However, according to the Society of Actuaries 2015 Risks and Process of Retirement Survey, 75% of pre-retirees underestimated their life expectancy, with over 40% incorrectly guessing by five years or more. According to the Social Security Administration a married couple at age 65 today has a 50-50 chance of at least one spouse living beyond age 90. Filing early for reduced benefits could severely shortchange income in retirement.

For everyone, there is a break-even point – typically between 12 and 15 years from the start of benefits, where accumulating higher benefits over a shorter period outweighs collecting smaller benefits over a longer period. If, based upon health conditions or family history, you don’t believe you will reach the break-even point, it could make sense to file for reduced benefits.

When to file for Social Security benefits is a personal decision and is unique to each individual and family situation. Social Security benefits were not designed to be the sole income source in retirement. Having other sources of income could affect when to take Social Security benefits based upon income and taxation considerations. Having a holistic financial advisor help coordinate retirement income could provide for a more tax-efficient and larger benefit than might otherwise be had.

Our next and final article on Social Security benefits will be the Odyssey Group’s take on the future of Social Security. If you have questions about Social Security benefits, please contact us. We would be happy to review your situation and work through your options.