Investment Planning: How Big is Your Nest Egg Really?
Learn how taxes, withdrawal strategies, and Roth conversions can affect the true value of your retirement nest egg and long-term retirement income planning.
Author: Matthew Williams CFP®, RICP®, CEXP®, CASL®, AEP® | Director of Financial Planning at Impact Advisors Group
The best time to claim Social Security depends on your health, income needs, work plans, family situation, and the rest of your retirement strategy. For some people, claiming early is reasonable. For others, waiting can permanently increase lifetime income and create more flexibility later. The key is making the decision as part of a larger plan, not treating Social Security like a switch you simply turn on when you retire.
Social Security is one of the most important retirement income decisions a person can make because the age you claim affects your monthly benefit for life. That decision can also affect a spouse, change cash flow, and shape how much pressure falls on your savings and investments over time.
For many households, Social Security is a foundation, not a complete retirement plan. It works best when coordinated with retirement accounts, taxable investments, pensions, part-time work, and tax planning. That is why claiming strategy deserves more attention than a quick rule of thumb.
A person born in 1960 or later has a full retirement age of 67. SSA says benefits can start as early as 62, but claiming early reduces the monthly amount. Waiting after full retirement age increases the benefit until age 70, when delayed retirement credits stop.
That means the question is rarely just, “When can I collect?” A better question is, “When should I claim based on the income I need and the income I may need later?”
Someone born in 1960 or later who claims at 62 receives about 70 percent of the full retirement age benefit. If full retirement age is 67 and the projected benefit at that age is $1,000 per month, claiming at 62 would reduce that example benefit to about $700 per month.
Claiming early can make sense when:
Early claiming is not automatically wrong. It is simply a tradeoff. You receive more payments over time, but each payment is smaller for life.
If you wait until full retirement age, you receive 100 percent of your benefit. If you delay beyond full retirement age, SSA says the monthly benefit continues to rise until age 70. For someone born in 1960 or later, claiming at 70 results in about 124 percent of the full retirement age benefit. Using the same $1,000 example, that would be about $1,240 per month.
Delaying can make sense when:
For many retirees, the appeal of delaying is not just the bigger monthly number. It is the extra margin of safety it creates later in life, especially if market conditions are poor or spending needs rise.
Let’s say a married couple is approaching retirement. One spouse expects a full retirement age benefit of $2,400 per month. The other spouse expects a much smaller personal benefit. If the higher earner claims at 62, the monthly amount could be reduced substantially. If that same spouse waits until 70, the household may lock in a much larger lifelong benefit. That larger benefit can matter even more if the couple lives a long time or if the surviving spouse later depends on a stronger benefit base. The right choice still depends on the rest of the plan, but this is exactly why Social Security timing should be modeled carefully rather than guessed.
Yes, you can work and collect Social Security at the same time. The complication is that SSA applies an earnings test before full retirement age. In 2026, if you are under full retirement age for the entire year, SSA deducts $1 in benefits for every $2 earned above $24,480. If you reach full retirement age during 2026, SSA deducts $1 for every $3 earned above $65,160 for the months before full retirement age. Once you reach full retirement age, there is no earnings limit.
This is an area where people often panic unnecessarily. The withheld benefits are not simply lost forever. SSA says it recalculates the benefit at full retirement age to give credit for months when benefits were reduced or withheld because of excess earnings.
That means working while claiming early is possible, but it needs to be planned carefully. A rushed filing decision can create short-term frustration if earnings are higher than expected.
Spousal planning is one of the most overlooked parts of Social Security. SSA says a spouse may receive up to half of the worker’s full retirement age benefit, depending on the spouse’s age when claiming. That can create meaningful opportunities for couples, especially when one spouse has much lower lifetime earnings.
There are also important filing rules. SSA explains that deemed filing rules generally require someone who is eligible for both their own retirement benefit and a spousal benefit to be treated as filing for both when they apply. In practice, that means couples need to be careful about assuming they can pick one benefit and postpone the other indefinitely.
Another important detail is that delayed retirement credits increase the worker’s own retirement benefit. They do not increase the basic spousal benefit amount itself.
This is one reason we encourage couples to review claiming options together. A strategy that looks reasonable for one spouse alone may be far less effective for the household as a whole.
The smartest Social Security claiming strategy usually depends on a short list of real-life factors:
Your health and family longevity:
Someone expecting a long retirement may benefit more from a larger later check. Someone with serious health concerns may value earlier access more.
Your current income needs:
If retirement income is tight and there are limited alternatives, early claiming may be necessary.
Whether you are still working:
The 2026 earnings rules can reduce benefits before full retirement age if wages are too high.
Your spouse’s benefits:
Couples often have better options when they coordinate timing rather than filing independently.
Your retirement assets and withdrawal plan:
Claiming strategy should work together with IRAs, taxable accounts, pensions, and future cash flow needs.
That broader coordination is exactly why our financial planning process matters. A filing date by itself rarely tells the full story.
Good Social Security planning is about more than maximizing one number. It is about building reliable income over time. Sometimes that means delaying benefits so other assets can work differently. Sometimes it means claiming earlier to preserve flexibility elsewhere. Sometimes it means coordinating around part-time work, retirement account withdrawals, or a spouse’s benefit options.
We often encourage clients to pair this decision with the kind of planning mindset discussed in our protection-first financial planning article. Retirement works better when income decisions are built around long-term stability, not just short-term convenience.
Should I claim Social Security at 62 or wait until 70?
It depends on your health, income needs, work plans, and whether you expect a long retirement. SSA says claiming at 62 reduces the monthly benefit, while waiting until 70 increases it for people eligible for delayed retirement credits.
What is full retirement age for Social Security?
For people born in 1960 or later, full retirement age is 67.
Can I work and still collect Social Security?
Yes. You can work while receiving benefits, but if you are under full retirement age, SSA’s earnings rules may temporarily reduce benefits. In 2026, the general limit is $24,480 if you are under full retirement age all year.
Can my spouse receive Social Security based on my record?
Possibly. SSA says a spouse may receive up to half of the worker’s full retirement age benefit, depending on the spouse’s age and eligibility.
Are reduced benefits from working lost forever?
Usually no. SSA says it recalculates benefits at full retirement age to give credit for months in which benefits were reduced or withheld because of excess earnings.
The age you claim Social Security can affect your income for decades. That is why the best decision usually comes from coordination, not guesswork. When we help clients think through retirement income, we look at the full picture, including work income, savings, spouse benefits, longevity, and how all of those pieces fit together.
If you are weighing your options and want to understand which path makes the most sense for your situation, start with our free financial assessment. A thoughtful review now can help you protect income, avoid avoidable mistakes, and make a more confident decision before you file.
Learn how taxes, withdrawal strategies, and Roth conversions can affect the true value of your retirement nest egg and long-term retirement income planning.
Use a mid-year business checkup to review revenue, cash flow, staffing, and personal wealth before year-end decisions become more difficult.
DIY investing may seem simple, but hidden costs can add up. Learn how investor behavior, taxes, time and planning gaps can affect long-term returns.
Learn when a Roth IRA or Roth conversion may make sense, and how taxes, Medicare premiums, charitable goals, and estate planning can affect the decision.