Navigating Social Security: Charting a Course for a Secure Retirement

“We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

— President Franklin D. Roosevelt at the signing of the Social Security Act, Aug. 14, 1935¹

Breaking it down

The Social Security program is less than 100 years old, but it’s an institution that’s woven into many aspects of American life. How many of us have Social Security income as the main focus of our retirement plans? How many of our friends or loved ones have been thrown a lifeline with survivors’ benefits after losing a family member? Or maybe someone you know has lost a job during their working years, but unemployment insurance kept them afloat until a new opportunity came along.

Despite the program approaching its 100th anniversary, and its deep integration into our society, it remains a complex puzzle to most Americans. Imagine your Social Security benefits as a finely tuned dial. Turn it too early, and you lock in a smaller number each month, potentially missing out on significant income over your lifetime. Turn it too late, and you might miss out on years of benefits of which you're entitled. 

Jump to: 

• Choosing When To Start
• Penalties and Course Corrections
• Supporting Your Loved Ones
• You're Not Alone: Taking the Next Steps

Social Security: A Promise, And A Puzzle

“Social Security is important because when you think about successful retirement planning, it's not so much about how much you've accumulated, it’s about how you position what you've accumulated to make sure it lasts as long as you do,” says Chamberlin Holistic Planner and National Social Security Advisor Scott Nolen. “In the grand scheme of cash flow planning, Social Security is oftentimes the only guaranteed lifetime source of income that people have, and there is a value to that. If you look at what it would take to buy that same cash flow on your own with your own assets, it's an enormous amount of money.” 

Many of the decisions you make about Social Security are intertwined with other choices, making the process even more confusing for many retirees. Let’s look at some of the factors you’ll need to consider.

Choosing When To Start

Starting to draw Social Security at different ages — 62, 67, and 70 — has vastly different, and often irreversible, implications on your monthly benefit, and, as a result, on your long-term retirement income.

Let's break it down: 

• Age 62  is the earliest age you can typically start receiving benefits. However, taking benefits this early results in a permanent reduction of your monthly payment.
• For many, Full Retirement Age is 67.² Taking benefits at your FRA means you receive your full, unreduced benefit amount.
• Delaying your benefits past your FRA results in an increase of 8% per year up until age 70³ (that’s a total of 24%!). This can significantly boost your monthly income, especially if you anticipate a long retirement.

“There’s a misconception that if you start your payments earlier, you’re going to get more checks, and that automatically means you get more money out of the program,” Nolen says. “But in reality, if you look at your benefits analysis, that break-even point typically happens somewhere between ages 78 and 81, depending on your particular situation. That means if you defer and you think there's a good chance you're gonna live past that age, you ultimately will pull more money out of the program by starting to draw later.”

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Penalties and Course Corrections

You may be genuinely surprised, even shocked, to learn that taking Social Security before your full retirement age can lead to substantial penalties if you continue to work. It's a common misconception that once you start receiving Social Security, you can earn as much as you want without consequence.⁴

If you're planning to work while receiving Social Security before you turn 67, you absolutely need to be aware of this earnings limit. Think of it as a temporary 'working penalty' imposed by the Social Security Administration (SSA). It's important to understand that this penalty is not intended to punish you for working; rather, it's designed to ensure that Social Security benefits primarily support those who have genuinely reduced their work hours or fully retired.

The SSA sets an annual limit on how much you can earn before your benefits start to be reduced. For 2025: 

• If you're under your full retirement age for the entire year, that limit is $23,400.⁵
  
  • If you earn more than that, for every $2 you make over the limit, your Social Security benefits will be reduced by $1.⁶
• In the year you reach your full retirement age, there's a different, higher limit, but it only applies to earnings before your birthday month. 
  
  • That number for 2025 is $62,160.⁵
  • This allows for a smoother transition as you approach your full retirement age.

But don't panic! This isn't a permanent loss. Once you reach your full retirement age, that earnings limit disappears entirely ⁷, and you can earn as much as you want without affecting your benefits. Plus, the Social Security Administration recalculates your benefits to account for any reductions you experienced earlier.⁸

Nolen emphasizes, however, that the way the penalty is collected is also important to consider. “The way they collect the penalty is to take the amount you go over the limit and divide that in half (that gives you the penalty), then they withhold 100% of your future checks until you get that penalty paid off,” he says. “So if you end up with a $10,000 penalty and your checks are $2,000 each month, you're going to have to go five months with no Social Security income.”

Avoiding these penalties is crucial, but what if you've already started to draw, and feel like you’ve made a mistake? What if you started taking benefits early and are now facing this earnings reduction? Not to worry: There are ways you can course-correct and potentially recover those lost benefits.

Let’s start with the “Do-Over” strategy 

Think of this as a reset button for your benefits. Here's how it works: If you started taking Social Security and then realized it wasn't the right move — maybe you went back to work, your financial situation changed, or you simply decided to change your gameplan — you can actually withdraw your application. But, there are some important rules to know:

• You have to act within 12 months of when you started getting your benefits. 
• You'll need to repay all the benefits you and anyone else on your record received. 
• And you can only do this once in your lifetime.⁹

So, why would you do this? Well, it's essentially a way to rewind the clock and give yourself the chance to potentially get much higher benefits later on by delaying. It’s most useful for people who started early, and then life threw them a curveball.

Another trick up our sleeve called the 'Stop/Start' strategy

Imagine you've started taking Social Security, maybe you took it early, and then you think, 'You know what? I don't really need this right now, or I want to get a bigger check later.' Well, you can actually tell Social Security to 'stop' your benefits. That's right, you can pause them!

Here's the deal: 

• If you've reached your full retirement age, you can voluntarily suspend your benefits.¹⁰ 
• For every year your benefits stay paused, they increase by a certain percentage until you reach age 70.³ 
• You can't just stop and start whenever you want — there are rules, and it's important to understand them.

With either of these strategies, you’re facing big decisions, and you'll want to carefully weigh the financial implications of putting your Social Security benefits on pause. These strategies can be powerful, and understanding them could be crucial for maximizing your Social Security.

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Supporting Your Loved Ones

Relationships matter, and Social Security acknowledges that. It’s not just about your own benefits; it's also about protecting your loved ones. The program provides spousal, survivors’ and divorced spouse benefits, ensuring financial security for those you care about. 

Spousal Benefits

The Social Security spousal benefit is designed to provide financial support to the spouse of a worker who is eligible for Social Security retirement or disability benefits. The program is based on the idea that both spouses in a marriage often contribute to the household, even if one spouse has lower lifetime earnings or did not work outside the home. 

The maximum spousal benefit is 50% of the higher-earning spouse's benefit amount at their full retirement age.¹¹ However, the actual amount a spouse receives can be less if they claim benefits before their reaching full retirement age themselves. Importantly, receiving a spousal benefit does not reduce the benefit amount of the higher-earning spouse.¹¹  

To be eligible for a spousal benefit, several conditions must generally be met: 

• The applicant must be at least 62 years old (although in some circumstances this age requirement may be waived.)¹²
• The marriage must have lasted for at least one year
• The higher-earning spouse must be receiving Social Security benefits.¹¹

Survivors’ Benefit

Imagine Social Security as a safety net that extends beyond your lifetime. The survivors’ benefit is that net, and it can be a lifeline for those you love.

This program is designed to provide financial support to your spouse or eligible family members after your passing. If your spouse passes away after you've both started taking Social Security, you may be eligible to receive their benefit, if it is higher than your own.¹⁴ There is also the option to take survivor benefits as early as age 60,¹⁵ if your spouse passes before that point.

The survivor's benefit is vital, especially for widows or widowers. But what about those who are divorced? Well, there’s also a strategy for that.

Divorced Spouse Benefit

If you were married for at least 10 years and are currently divorced¹⁷, you might be able to collect Social Security benefits based on your ex-spouse's earnings record. And here's the best part: You can do this even if your ex-spouse has remarried!¹⁸

Here's how it works: 

• You must have been married to your ex partner for at least 10 years.¹⁶ 
• You must be at least 62 years old.¹⁸ 
• Your ex-spouse must be eligible for Social Security, but they don't have to be taking it.¹⁹

If you haven't remarried, or if you remarry after age 60,²⁰ you can still get this benefit. The amount you get is generally half of your ex-spouse's full retirement age benefit.²¹ If you qualify for benefits on your own work record, you'll get the higher of the two benefits.²²

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You're Not Alone

As you can see, Social Security isn't just set-it-and-forget-it, and it’s more than just a monthly check. It's a dynamic tool, and understanding the rules can truly transform your retirement. In the end, it's about knowing you've made informed choices, that you're in control, and that you've secured the best possible outcome for yourself and your family.

Chamberlin is here to help you navigate the options and create a plan tailored to your needs, goals and dreams. As part of the Chamberlin holistic planning process, we'll help to de-mystify the complex calculations behind your Social Security benefit. You’ll receive a complementary, but invaluable, Social Security Optimization Report. This isn’t just a generic estimate; it's a personalized analysis of your potential benefits at different ages, tailored to your unique situation. We consider your earnings history, marital status, life expectancy, and other relevant factors to provide you with a clear picture of your options. This allows you to make an informed decision based on your specific needs and goals.

“Taking Social Security can impact the taxes, and taxes can impact Social Security,” Scott Nolen says. “It's all interwoven. There's no piece of retirement planning that stands all alone. It can't. You can't just focus on income planning or investment planning. You can't just try to nail the Social Security decision because that increases the chances that you'll shoot yourself in the foot elsewhere.”

Visit our online Learning Center for more retirement resources, and Schedule a Call Today and take the first step toward a confident financial future.

Sources:

1. Social Security Administration. (n.d.). FDR's statements on Social Security. Retrieved April 8, 2025, from https://www.ssa.gov/history/fdrstmts.html
2. Social Security Administration. (n.d.-a). When to start Social Security. Retrieved from https://www.ssa.gov/benefits/retirement/age.html
3. Social Security Administration. (n.d.-b). Delaying retirement. Retrieved from https://www.ssa.gov/benefits/retirement/delaying.html
4. AARP. (n.d.). 10 Myths and Misconceptions About Social Security. Retrieved from https://www.aarp.org/social-security/myths-misconceptions-explained/
5. Social Security Administration. (n.d.-c). Retirement earnings test. Retrieved from https://www.ssa.gov/benefits/retirement/planner/earncredit.html
6. Social Security Administration. (n.d.-d). If you work while getting benefits. Retrieved from https://www.ssa.gov/pubs/EN-05-10069.pdf
7. Social Security Administration. (n.d.-e). Working while retired. Retrieved from https://www.ssa.gov/pubs/EN-05-10003.pdf
8. Social Security Administration. (n.d.-f). How your earnings affect your benefits. Retrieved from https://www.ssa.gov/benefits/retirement/planner/earn.html 
9. Social Security Administration. (n.d.-g). Withdrawing your application. Retrieved from https://www.ssa.gov/benefits/retirement/planner/withdraw.html
10. Social Security Administration. (n.d.-h). Suspending retirement benefits. Retrieved from https://www.ssa.gov/benefits/retirement/planner/suspend.html
11. Social Security Administration. (n.d.). Benefits for spouses. Retrieved from https://www.ssa.gov/oact/quickcalc/spouse.html
12. J.P. Morgan. (n.d.). Social Security rules for married, divorced and widowed people. Retrieved from https://www.jpmorgan.com/insights/retirement/social-security-rules-for-married-and-divorced-people
13. National Council on Aging. (2024, August 12). Do I qualify for Social Security spousal benefits? Retrieved from https://www.ncoa.org/article/what-is-the-social-security-spousal-benefit/
14. Social Security Administration. (n.d.-i). Survivors benefits. Retrieved from https://www.ssa.gov/benefits/survivors/
15. Social Security Administration. (n.d.-j). When a widow or widower can start getting benefits. Retrieved from https://www.ssa.gov/benefits/survivors/survivorchart.html
16. Social Security Administration. (n.d.-k). Benefits for divorced spouses. Retrieved from https://www.ssa.gov/benefits/retirement/survivors.html
17. Social Security Administration. (n.d.-l). If you are divorced. Retrieved from https://www.ssa.gov/benefits/retirement/divorced.html
18. Social Security Administration. (n.d.-m). When can I get benefits as a divorced spouse? Retrieved from https://www.ssa.gov/benefits/retirement/planner/divspouse.html
19. Social Security Administration. (n.d.-n). Your ex-spouse qualifies for benefits. Retrieved from https://www.ssa.gov/benefits/retirement/planner/exspouse.html
20. Social Security Administration. (n.d.-o). Remarrying and Social Security. Retrieved from https://www.ssa.gov/benefits/retirement/planner/remarry.html
21. Social Security Administration. (n.d.-p). How much will I get as a divorced spouse? Retrieved from https://www.ssa.gov/benefits/retirement/planner/exspouse.html
22. Social Security Administration. (n.d.-q). If you qualify for benefits on your own record. Retrieved from https://www.ssa.gov/benefits/retirement/planner/exspouse.html