Choosing a Social Security claiming strategy with Ritholtz Wealth Management

What age makes a Social Security claiming strategy a real decision?

“I’ll decide when I’m 62” misses the first cash-flow problem: your Social Security claiming strategy becomes real when work income stops, often two years before the earliest filing age. For Nils, a hypothetical single electrical engineer, that moment is age 60, when his salary ends and savings begin covering each month.

Anyone born in 1960 or later can start between age 62 and age 70, a span of 97 possible start months; full retirement age is 67 under SSA rules. The work is two decisions joined together: name the filing month, then name the account that pays every month until that check arrives.

When you want a filing plan before the last paycheck

DIY investors often think the application is the whole job. It isn’t. The filing screen takes little time; the useful work is checking the earnings record, building the bridge from salary to benefits, and putting a real filing date on the calendar.

During weeks one and two, you download your SSA statement and full earnings record. Ritholtz Wealth Management compares each year with your W-2 paperwork, because a missing year enters the 35-year average as a zero. A low year may be correct, but it should never be a surprise discovered after filing.

During weeks three through six, Ritholtz Wealth Management builds a month-by-month sheet from age 60 through age 70. It tests claims at 62, 64, 67, and 70, then marks cash first, the brokerage account next, including planned employer-stock sales, and the IRA later. Before suggesting a sale, our team checks the available lots and the tax effect of the cash you need. Forecasts don’t get to choose the filing date.

In weeks seven through ten, the chosen bridge amount moves to cash and short-term bonds. You also decide whether the IRS should withhold federal tax from benefits using Form W-4V. In weeks 11 through 13, you receive a written plan naming the claim month. The SSA takes applications as early as four months ahead of the month benefits start, so that opening date goes on your calendar.

Weeks one through six: check the record and model cash

Weeks seven through 13: fund the bridge and file on time

How much does waiting to 67 really cost?

“The money is mine, so taking it at 62 can’t be wrong” ignores the permanent monthly reduction and the cost of funding the wait. The SSA cuts each of the first 36 months before full retirement age by 5/9 of 1% a month, then each earlier month by 5/12 of 1%; each year after 67 adds 8% through age 70.

The better choice turns on the bridge amount, health, and expected lifespan, not a hunch about markets.

For illustration, hypothetical Nils stops work at 60, and his SSA statement shows $3,200 a month at 67. Filing at 64 is 36 months early: 36 × 5/9 of 1% = 20%, so the check is $2,560. Waiting to 67 means giving up 36 checks: 36 × $2,560 = $92,160. That is the bridge he would set aside, under 7% of his $1.4M. In return, each check is $640 larger for life. $92,160 ÷ $640 = 144 months, or 12 years, so the later claim pulls ahead at about age 79, before COLAs and taxes.

The break-even age barely moves as much as people expect. Assume the statement’s $3,200 age-67 amount, today’s dollars, and no taxes, COLAs, or investment growth. Wherever the claim starts, the larger later check catches up around age 79 to age 82.

Doing nothing has a cost too. When cash gets thin, people often file at 62. On Nils’s $3,200 figure, that produces $2,240 a month, or $960 less for life, which is $11,520 a year. A bridge kept in stocks can drop in value, principal included, just when the withdrawals start. Someone who would have to sell shares in a slump to fund the wait may reasonably claim earlier.

Shortcut: if the checks you would give up add up to less than 10% of invested savings and you expect to live past about age 80, waiting at least until full retirement age is usually affordable. Nils’s $92,160 bridge is under 7% of $1.4M. A serious health condition changes the calculation, as does a bridge funded only by selling depressed stock. No plan can predict lifespan.

The bridge is smaller than it looks

Break-even ages under one assumption

What a Social Security adviser, Ritholtz Wealth Management included, should put on paper

A Social Security adviser should show the filing month, the bridge account, break-even arithmetic, and the effect of earnings and taxes in writing. A software score is not enough, especially when a single investor has employer stock, RSUs, and a retirement date that arrives before benefits can begin.

Ritholtz Wealth Management discusses its fee during the first conversation and puts it on paper before any modeling starts. If you are still years from leaving work, wait. With your earnings history, retirement month, and benefit estimates too unsettled to model, starting now would mean redoing the work later.

• Break-even: Will you show the break-even age with arithmetic, not just a software score?
• Earnings record: Will you check for missing or low years before running numbers?
• Bridge: Which account pays each month, and what changes in a down market?
• Taxes: Claim age can change taxable benefits and Medicare premiums two years later; the Medicare IRMAA review covers that detail.
• Pay: How are you paid, and do you receive anything from annuities?

How much can you earn after claiming before checks are held back?

“Part-time pay won’t matter” can leave a hole in the budget: before full retirement age, the SSA 2026 earnings test holds back $1 of benefits for every $2 earned above $24,480 a year. In the year you reach full retirement age, the limit is $65,160 and the SSA withholds $1 for every $3 above it.

Nils could file at 62 “to be safe,” then earn $44,480 consulting. That is $20,000 above the limit, so $10,000 of checks is held back, about four and a half months of a $2,240 benefit. The SSA later recalculates the benefit at full retirement age, but that cash is missing in the year his budget expected it.

Paperwork to pull before a first conversation about claiming

Bring the numbers that set the benefit, the bridge, and the final working-year income. Ritholtz Wealth Management uses them to test a filing date against the cash you will actually have, not a generic retirement calculator. The SSA wage base is $184,500 for 2026, so late-career RSU income reported as Social Security wages can still improve an earnings record up to that amount.

A pre-Medicare health insurance quote belongs in the pile because retirement at 60 creates a coverage bill before Medicare begins. Statements also show whether the bridge can come from cash and broad investments without forcing a hurried employer-stock sale. Paperwork first. Guessing later is backwards.

• SSA statement and earnings record: These set each benefit estimate and reveal zero years.
• Last W-2s or pay stubs: RSU income may count as Social Security wages up to the SSA $184,500 wage base.
• Stock and RSU vesting schedule: This shows when cash arrives and how large the bridge must be.
• Account statements and health quote: These show what pays from age 60 to filing and what those months cost.