Navigating Social Security can feel overwhelming, but understanding its basics is crucial for maximizing your benefits and securing your financial future. Whether you’re approaching retirement or planning ahead, these 12 essential details will guide you in making informed decisions about when and how to claim your benefits.

Your Full Retirement Age (FRA) is the age at which you’re entitled to 100% of your Social Security benefits. For those born between 1943 and 1954, the FRA is 66. It gradually increases to 67 for those born in 1960 or later. Claiming benefits early (as soon as age 62) reduces your monthly payments by as much as 30%, while delaying until age 70 increases your benefits by 8% annually.

To qualify for Social Security benefits, you must earn 40 credits, which equates to 10 years of work. In 2025, you earn one credit for every $1,810 in income, up to four credits per year. Ensuring you meet this requirement is the first step toward accessing benefits.

Your monthly benefit amount is based on your highest 35 years of earnings, adjusted for inflation. If you have fewer than 35 years of earnings, the missing years are calculated as $0, lowering your average. Working part-time or delaying retirement can replace lower-earning years with higher-earning ones, boosting your benefits.

Social Security benefits are adjusted annually for inflation. In 2025, beneficiaries receive a 2.5% COLA, ensuring their payments keep pace with rising costs. This adjustment is particularly valuable, acting as built-in inflation protection.

Claiming benefits early results in a permanent reduction but delaying beyond FRA increases your benefit by 8% annually until age 70. For example, waiting until age 70 can increase your benefits by as much as 32% compared to claiming at FRA. This strategy is especially beneficial for high earners who want to maximize survivor benefits for their spouse.

If you’re married, you may qualify for spousal benefits, which can be up to 50% of your spouse’s benefit amount. This is especially helpful if your own earnings are significantly lower. Spousal benefits are reduced if claimed before FRA but can still provide valuable financial support.

As of 2025, the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) have been repealed, meaning those who worked in positions without paying Social Security taxes (e.g., teachers or railroad workers) will no longer see reduced benefits. This change retroactively applies to benefits received after December 31, 2023.

Widows, widowers, and eligible children can receive survivor benefits. At FRA, a survivor can receive 100% of their deceased spouse’s benefit. Children under 18 (or up to 19 if still in high school) are also eligible for benefits worth up to 75% of the deceased’s benefit.

Pro Tip: If you’re eligible for both your own and survivor benefits, consider taking the lower benefit first and switching to the higher one at age 70.

If you were married for at least 10 years, you may be eligible to claim benefits based on your ex-spouse’s earnings record. This won’t affect your ex-spouse’s benefits or their current spouse’s entitlement. Divorced individuals can also claim survivor benefits if their ex-spouse passes away.

If you regret claiming benefits early, you have a 12-month window to withdraw your application and repay any benefits received. Alternatively, if you’ve reached FRA, you can suspend benefits to earn delayed-retirement credits, increasing your benefit amount.

Social Security benefits may be subject to federal income tax depending on your provisional income. If your provisional income exceeds $25,000 (single) or $32,000 (married filing jointly), up to 85% of your benefits could be taxable. Strategies like converting traditional IRAs to Roth IRAs or using qualified charitable distributions (QCDs) can help reduce your tax burden.

If you work after claiming benefits before FRA, your benefits may be reduced if your earnings exceed $23,400 in 2025. For every $2 earned above this limit, $1 in benefits is withheld. Once you reach FRA, the earnings test no longer applies, and withheld benefits are recalculated to increase your future payments.

Social Security is a critical part of retirement planning, but the decisions you make about when and how to claim benefits can significantly impact your financial future. By understanding these 12 key details, you can take steps to maximize your benefits and create a more secure retirement.

Need Help Navigating Social Security? At Florida Retirement Group (FRG), we specialize in personalized retirement planning. Let us help you determine the best strategies for claiming Social Security, maximizing your income, and achieving financial freedom.

Article Source:

LeValley, D., & Block, S. (2025, January 8). Social Security Basics: 12 things You Must know to Maximize your benefits. Kiplinger.com.