The Secret Cost of Claiming Social Security Too Early (or Too Late)

Nov 16, 2025

Explore the nuances of claiming Social Security and how timing impacts retirement plans. Learn about the effects of early versus delayed claims on taxes and benefits for survivors. Discover the importance of aligning Social Security decisions with personal finances and investment strategies. Understand the role of 401(k)s and IRAs in optimizing tax efficiency. Dive into the pros and cons of different claiming ages, including how choices affect both income and long-term growth. Prioritize a coordinated approach for a successful retirement.

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INSIGHT

Timing Is Part Of A Bigger Plan

Social Security timing must fit your life and overall financial plan, not just maximize the check.
The decision affects taxes, portfolio resilience, and survivor benefits, so coordinate it with your full plan.

INSIGHT

How Your Benefit Is Calculated

Your Primary Insurance Amount (PIA) equals your full retirement age benefit based on your highest 35 indexed earning years.
Missing years count as zeros and lower your average, so career gaps matter to the PIA.

ADVICE

Don't Treat Delays As Pure 8% Returns

Delaying past FRA yields 8% delayed retirement credits per year up to age 70, but it's not a pure 8% investment return.
Treat delayed credits as actuarial adjustments, not equivalent to market returns when planning.

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Forget the race for the biggest Social Security check. The real question isn’t how high your benefit can go, it’s how well it fits your life, taxes, and long-term plan.

In this episode, James breaks down how the timing of your claim shapes everything: portfolio resilience, tax efficiency, survivor benefits, and the freedom to retire when you want, not when the system says you should.

Starting with the foundation (your 35 highest earning years) we unpack what really happens when you claim early, wait for full retirement age, or delay until 70. You’ll hear how each path affects your taxable income, Roth conversion opportunities, and even the size of your surviving spouse’s check.

It’s not about chasing an 8% “return” on delay; it’s about coordination. For those with meaningful savings in 401(k)s or IRAs, waiting can unlock a powerful tax window that permanently lowers RMDs. And for those still working or navigating a market downturn, claiming early can sometimes protect your portfolio from harmful withdrawals.

By the end, you’ll see how aligning Social Security with your health, income sources, and retirement goals builds an income floor that funds confidence, not just checks.

Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.

The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.

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Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.

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