The Most Common Social Security Timing Mistake

One of the most common assumptions we hear from successful professionals approaching retirement is that Social Security is a simple decision: pick a date, file, and move on. In reality, when you claim Social Security is often one of the most consequential retirement income decisions you’ll make—and one that’s difficult to reverse.

The challenge isn’t a lack of information. It’s that the “right” timing depends less on rules and more on how Social Security fits into the broader picture of your retirement income, taxes, and longevity planning.

Why Timing Matters More Than Most People Expect

Social Security is designed to be flexible, but that flexibility creates trade-offs. Claiming earlier provides income sooner, while waiting increases your monthly benefit for life. What’s often overlooked is that this choice doesn’t exist in isolation—it interacts with investment withdrawals, tax brackets, and even Medicare premiums.

For many retirees, Social Security becomes the closest thing to a personal pension: inflation-adjusted, government-backed, and guaranteed for as long as you live. Decisions around when to turn it on can quietly shape the stability of your income decades into retirement.

Understanding the Three Common Claiming Windows

Most conversations around Social Security timing center on three ages: early eligibility, full retirement age, and age 70. Each comes with a distinct planning implication.

Claiming early (as early as age 62) permanently reduces your monthly benefit. While this can make sense in specific circumstances, it often results in a lower lifetime income if you live into your 80s or beyond—a reality many professionals underestimate.

Claiming at full retirement age provides your “baseline” benefit, avoiding early reductions but forgoing the opportunity to earn delayed retirement credits.

Delaying until age 70 increases your benefit significantly through guaranteed annual increases. For individuals with sufficient assets to fund the early years of retirement, this delay can act as a powerful form of longevity insurance.

The key point is that none of these options is universally “correct.” The optimal choice depends on how the rest of your retirement plan is structured.

The Tax Conversation Most People Miss

Social Security timing is also a tax decision, whether you intend it to be or not. Claiming benefits while still earning income—or before coordinating withdrawals from retirement accounts—can trigger unnecessary taxation of benefits and accelerate required distributions later on.

In many cases, delaying Social Security while strategically drawing from taxable or tax-deferred accounts can smooth lifetime tax exposure. This coordination often creates more flexibility than focusing on Social Security alone.

Longevity, Lifestyle, and Legacy Considerations

Another overlooked factor is longevity risk. If you or your spouse are likely to live longer than average, delaying benefits can materially improve long-term income security—particularly for the surviving spouse.

Lifestyle goals also matter. Some retirees value earlier income for travel or personal pursuits, while others prioritize predictable income later in life. Social Security timing should support those priorities, not work against them.

A Decision That Deserves Context

Social Security was never intended to be a standalone decision. It works best when integrated thoughtfully with investment strategy, tax planning, and long-term cash flow needs.

Before choosing a claiming date, it’s worth stepping back and asking a broader question: How does Social Security support the kind of retirement I want to sustain over time?

At Saxony Advisors, we help clients evaluate this decision within the full context of their financial lives—so that timing becomes a strategic choice rather than a default one. If you would like to discuss this, you can set up an introductory phone call here!