5 Things Everyone Should Know About Social Security Benefits

  • Q: How many years are considered to determine my benefit?
  • A: Your Social Security benefit is calculated based on your highest 35 years of earned income. So, If you worked more than 35 years, the lower-earning years are dropped. If you worked fewer than 35 years, Social Security fills in the missing years with $0, which can lower your benefit. The average of those 35 years is used to calculate your Primary Insurance Amount (PIA)—the monthly benefit you’d receive at full retirement age.  This should be carefully considered within your tax planning strategy if you are someone who minimizes reported wages—such as through low S-corporation salaries, aggressive use of bonus depreciation, or similar strategies. Applying these strategies may ultimately reduce monthly benefit at retirement.
  • Q: What average benefit amount should I expect to receive?
  • A: According to Social Security the average retired worker benefit in 2025 was just over $2,015 per month, and the 2026 COLA (Cost of Living Adjustment) adds about $56 on average. Obviously, actual amounts vary significantly depending on an individual’s lifetime earnings.
  • Q: What is the minimum age at which I can begin drawing my benefit?
  • A: The earliest you can begin collecting this benefit is age 62. It’s important to note that electing earlier than your full retirement age (FRA) of 67 (for those born 1960 and later) could reduce your benefits.
    A screenshot of a white background AI-generated content may be incorrect.
  • Q: I had an Advisor suggest that I consider starting my Social Security benefit at age 62 and investing it. Is that a wise strategy?
  • A: After reaching full retirement age, your Social Security benefit increases by about 8% for each year you delay claiming. The best part? These increases are both tax-free and guaranteed. In your 60s, it can be important to focus on secure, low-risk strategies. At Copper Leaf Financial we do NOT recommend to our clients that they begin collecting benefits at 62 and investing it. It is important to note that when electing Social Security before FRA (full retirement age), earnings above a certain limit will reduce the benefit you receive.
  • Q: When should I begin drawing my benefit?
  • A: There is no clear, one-size-fits-all answer to this question that applies to every person. Three key factors influence this decision:
    • Consider your personal health and anything that may affect your longevity;
    • Consider your overall financial situation, including who else may be drawing on this account besides you;
    • Review other sources of income in retirement to determine the feasibility of waiting to elect.

At Copper Leaf Financial we work closely with our clients to develop a comprehensive strategy for Social Security benefits – one that considers their personal situation and incorporates tax-savvy strategies. Reach out to us today to discover how we can help you and your family. Learn more about optimizing Social Security benefits.

Recipients should not act on the information presented without seeking prior professional advice. Check with your advisor about your specific situation or contact Copper Leaf Financial at 802.878.2731

#SocialSecurity #retirementplanning #FinancialPlanning