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The basics
A worker can generally claim retirement benefits from 62 through 70. Claiming before full retirement age permanently reduces the monthly amount; delaying after full retirement age increases it, with no further delayed credits after 70.
The plan asks for the full-retirement-age amount from the SSA statement — and, with planned earnings on, folds the plan’s own future wages into the 35-year average behind it — so changing the claiming month changes both when the income starts and how much it pays.
Illustrative numbers
A worker born in 1960 or later
Full retirement age67
Benefit at 67$2,000 a month
Claim at 62about $1,400 a month
Claim at 70about $2,480 a month
The plan starts the priced amount at the claiming month and carries the annual stream with inflation, the way real benefits carry a cost-of-living adjustment. The example isolates the worker’s own benefit before household tax and spousal effects.
Calculation transparency
How it works in MoneyWhatIf
- 01
The entered monthly figure is read as the person’s primary insurance amount at full retirement age in today’s dollars, not as the check at the selected claiming age.
- 02
With planned earnings on, the plan rebuilds the 35-year average: the statement’s figure stands for the years already worked, and the plan’s own FICA-paying wages — capped at each year’s wage base, self-employment counted at its 92.35% net share — fill the rest through the claiming year. A zero statement figure with planned earnings on estimates the whole benefit from the plan’s wages alone.
- 03
SSA’s month-based early-claiming reductions or delayed-retirement credits are applied from the person’s modeled birth year, at month precision, and the expected-percentage lever scales whatever the arithmetic produced.
- 04
For a couple, a spousal excess is paid where half the worker’s record beats the spouse’s own, starting at the later of the two filings and reduced by the spouse’s age on that month, within the worker’s family maximum. After one person dies in the projection, the survivor keeps the larger modeled benefit rather than both.
- 05
The benefit follows the plan’s inflation assumption after the claim. Its federal and supported-state income-tax treatment is calculated separately under the Social Security taxation guide.
- 06
A Social Security income card answers one of two ways — “Estimate from my record”, which is everything above, or “Enter an amount”, where the typed figure and schedule are accepted as stated rather than repriced.
Keep in mind
Model limits
The model uses an entered statement amount and ages derived from the household’s current ages. It does not retrieve an SSA record or reproduce the exact application month, cost-of-living notices, withholding, or benefits withheld under the earnings test before full retirement age.
WEP, GPO, disability conversions, benefits for children, divorced-spouse facts, the survivor benefit’s own claiming rules, and every family-maximum detail beyond the spousal clip are not fully represented.
The model compares cash-flow scenarios; it does not recommend a claiming age or establish benefit eligibility.
This explanation documents the planning model. It is educational, not individualized tax, legal, Medicare, or investment advice.
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The words behind it
Related financial terms
Plain-English definitions, with 2026 figures and worked examples, from the financial terms glossary.