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Timing your Social Security retirement benefits isn’t simply choosing an age and calling it a day. This is one of the biggest financial choices you’ll make, and there are many rules and personal factors to consider. If retirement is on the horizon, it’s important to feel confident in your Social Security decisions.

In this episode of Money Wisdom, Nicholas J. Colantuono, CFP® shares five key rules to know before filing for Social Security.

1. How Benefits Are Calculated

Over a 35-year career, your income naturally rises and falls as job changes and life events occur. Social Security accounts for this by averaging your highest 35 years of earnings to calculate your benefit. This is why many people choose to continue working later in their careers. Those extra years of income may replace your lower-earning years and ultimately increase your benefit.

2. When to Claim

You can claim Social Security benefits anywhere between age 62 and 70. Filing at age 62 means you receive a reduced benefit. To get your full benefit, you must wait until your full retirement age, which falls between age 66 and 67 depending on your birth year. Or you could choose to delay benefits until age 70 for the maximum payout.

Our general rule of thumb is that Social Security is retirement income. You should take it when you need it and when it makes most sense within your financial plan.

3. Working While Receiving Benefits

If you’re still working and earning enough to meet your income needs, it often doesn’t make sense to collect Social Security. Continued work can increase your future benefit as it grows more the longer you delay.

If you take benefits before your full retirement age and continue to work, your benefits might be lowered. This reduction depends on how much you earn, and for 2026, the earnings test limit is $24,480 per year. However, once you reach full retirement age, there is no longer an earnings penalty.

4. Spousal Benefits

Spouses can claim benefits based on their partner’s work history if it results in a higher payment than their own benefit. The spousal benefit can be up to 50% of the higher-earning spouse’s full retirement age benefit. Divorced spouses may also qualify if they meet certain requirements.

5. Taxes on Benefits

On the federal level, the first 15% of your Social Security is never taxable. But the remaining portion may face a tax rate of 0%, 50%, or up to 85%, depending on your modified adjusted gross income. Depending on where you live, you may also have to pay state taxes on your benefits. By working with a financial advisor or tax planner, you can implement strategies to help lessen the tax burden.

Need help making the right Social Security decisions? Get your free Social Security Decisions guide by texting “SOCIAL” to 800-757-0436.