For many university professors, Social Security benefits make up a significant part of their retirement income. According to the Social Security Administration, these benefits account for approximately 31% of the income for individuals over age 65. As of December 31, 2024, nearly 90% of people in that age group were receiving Social Security.

Despite its importance, many people may lack a solid understanding of how the system works. A nationally representative survey conducted by the Understanding America Study (UAS) found that only 27% of respondents knew how Social Security benefits are calculated. Even fewer were aware of other essential features, such as cost-of-living adjustments and spousal benefits.

Given how vital Social Security is to retirement planning, understanding its rules and available claiming strategies is crucial. While entire books have been written on the topic, this article will focus on key facts and strategies to consider when planning to claim Social Security benefits.

Maximizing Your Social Security Benefits

Social Security benefits are calculated based on an individual’s Primary Insurance Amount (PIA), which is the monthly benefit they’re entitled to receive at their full or normal retirement age (FRA).

Claiming Early: You can begin collecting Social Security benefits as early as age 62. However, doing so means accepting a reduced monthly benefit compared to your full PIA. Here’s how the reduction works:

For the first 36 months before reaching FRA, your benefit is reduced by 5/9 of 1% for each month.

For any additional months beyond those 36, the reduction is 5/12 of 1% per month.

For example, let’s say someone’s PIA is $3,000 and they plan on collecting 48 months prior to their full retirement age FRA. This would result in their benefit being reduced by 5/9 of 1% for the first 36 months, or a 20% reduction in benefit. Furthermore, the remaining 12 months would be reduced by 5/12 of 1%, for an additional 5% reduction in benefit. The total reduction in benefit would then be 25%. The actual monthly benefit received would equal to $2,250 per month if collected 48 months prior to FRA.

Full Retirement Age (FRA) and Normal Collection: For individuals born in 1960 or later, full or normal retirement age (FRA) is 67. Reaching FRA comes with two key advantages:

You’re eligible to receive your full Primary Insurance Amount (PIA), rather than the reduced benefit applied to early claimants.

Your Social Security benefit is no longer reduced if you continue to earn income.

If you collect benefits before reaching FRA, your benefit may be reduced based on your earned income. In 2024, for example, $1 in benefits is withheld for every $2 earned above the annual earnings limit. In the year you reach FRA, the rules ease—only $1 is withheld for every $3 earned above a higher threshold. Once you reach FRA, however, these earnings limits disappear entirely—you can earn any amount without affecting your Social Security benefits.

Many university faculty members continue working past FRA, even into their 70s. It’s important to note that there is no financial advantage to delaying benefits beyond age 70—in fact, doing so could mean leaving money on the table. Additionally, the Social Security Administration allows individuals to apply for up to six months of retroactive benefits, provided they’ve already reached FRA.

Delayed Collection: Choosing to delay Social Security benefits beyond your FRA can significantly increase your monthly payment. For each year you postpone collecting, up to age 70, your benefit grows by 8%, or approximately 2/3 of 1% for each month of delay.

So, why not wait?
The decision to delay benefits isn’t always straightforward. Factors such as your need for income in retirement, personal health, and family history of longevity all play a role. If you retire and need immediate cash flow, waiting until 70 may not be practical. Similarly, if there’s a family history of shorter life expectancy, claiming earlier could result in greater total benefits over your lifetime.

Ultimately, the timing of when you begin collecting Social Security is a personal decision, and understanding the financial trade-offs is essential for creating a retirement income plan that fits your needs.

Maximizing Social Security Benefits for Married Couples and Surviving Spouses

Building on the strategies for early, normal, and delayed collection, married couples have additional opportunities to optimize their Social Security benefits.

For the Higher-Earning Spouse: In most cases, it’s beneficial for the higher-earning spouse to delay claiming Social Security as long as possible—ideally until age 70. This approach not only maximizes their own retirement benefit but also increases the potential survivor benefit for their spouse. When one spouse passes away, the surviving spouse is eligible to receive the higher of the two benefits. If the survivor claims at their full retirement age, they receive 100% of the deceased spouse’s benefit. However, collecting earlier will reduce the amount of the survivor benefit.

For the Lower-Earning Spouse: Lower-earning spouses may benefit from Social Security spousal benefits, which can be as much as 50% of the higher earner’s Primary Insurance Amount (PIA) if claimed at the lower earner’s FRA. While spousal benefits can be claimed as early as age 62, doing so results in a reduced benefit. One common strategy is for the lower-earning spouse to begin collecting their own retirement benefit at age 62 and then switch to the spousal benefit once the higher-earning spouse begins collecting their benefit.

Understanding how spousal and survivor benefits work can help make a significant difference in a couple’s long-term retirement income planning.

Maximizing Social Security Benefits for Divorced Individuals

Divorced individuals may be eligible to receive Social Security benefits based on their ex-spouse’s work record—essentially under the same rules as a married spouse. To qualify, the individual must:

• Have been married to their ex-spouse for at least 10 years
• Be currently unmarried
• Be at least 62 years old

The strategies for maximizing benefits are similar to those for married couples. While benefits can be claimed as early as age 62, doing so will reduce the monthly amount and subject the recipient to the earnings limit if they are still working. It’s important for divorced individuals to compare their own benefit to the spousal benefit available through their ex-spouse to determine which option provides the greatest long-term value.

Putting It All Together

Claiming Social Security is considered a critical and often complex part of retirement planning. Understanding the trade-offs of claiming at different ages, coordinating benefits with a current or former spouse, and knowing how to navigate the rules can make a meaningful difference in your financial security during retirement.

Given the importance of Social Security in most retirement income plans, working with a financial advisor can help you develop a claiming strategy that fits your specific circumstances and maximizes your benefits.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation. Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only