6 Essential Things to Do Until Then
The Social Security Administration rewards patience when it comes to claiming retirement benefits. While you can begin receiving benefits as early as age 62, starting before your full retirement age results in permanently reduced monthly payments. Full retirement age currently ranges between 66 and 67, depending on your birth year. For those born in 1960 or later, full retirement age is 67.
If you’re planning to wait until age 65 or later to claim your Social Security benefits, you have a valuable opportunity to prepare financially and maximize your retirement security. Here are six strategic steps you can take in the meantime to ensure you’re ready when the time comes.
1. Review Your Social Security Statement
The Social Security Administration provides every U.S. citizen with a personalized Social Security statement that contains crucial information about your earnings history and benefit eligibility. This statement is your roadmap to understanding what you can expect from Social Security.
Your Social Security statement includes:
- A complete record of your earnings history throughout your working career
- Estimates of your retirement benefits at different claiming ages (62, full retirement age, and 70)
- Information about disability and survivor benefits
- Details about how much you and your employers have contributed in Social Security taxes
You can access your statement anytime by creating a My Social Security account at ssa.gov. If you’re 60 or older, the Social Security Administration will also mail you a statement three months before each birthday. Review this document carefully to verify the accuracy of your earnings record and understand your projected benefits.
2. Understand Your Income Replacement Needs
According to the federal government, most American adults need between 70% and 90% of their pre-retirement income to maintain their standard of living after they stop working. However, Social Security benefits typically replace only about 40% of most people’s pre-retirement income.
This significant gap means you’ll need additional sources of retirement income beyond Social Security. Before you retire, take inventory of all your available income sources:
- Individual Retirement Accounts (IRAs): Understand the withdrawal rules, including required minimum distributions that begin at age 73.
- 401(k) and other employer-sponsored retirement plans: Review contribution limits, matching policies, and distribution options.
- Pension benefits: If you’re fortunate enough to have a traditional pension, understand your payout options and whether you can choose between lump-sum or monthly payments.
- Investment accounts and savings: Calculate how much you have in taxable brokerage accounts, savings accounts, and other liquid assets.
Understanding the total picture of your retirement income will help you determine whether waiting to claim Social Security is financially feasible and how long your other assets need to sustain you.
3. Calculate Your Retirement Budget
Retirement brings significant changes to your monthly expenses. While some costs disappear, others may increase substantially. Creating a realistic retirement budget now will help you avoid financial surprises later.
Start by reviewing your current budget and identifying expenses that will change after you stop working:
Expenses That May Decrease:
- Commuting costs (gas, public transportation, parking)
- Work clothing and dry cleaning
- Eating lunch out daily
- Childcare or pet care during work hours
- Retirement account contributions
Expenses That May Increase:
- Healthcare costs, especially if you retire before Medicare eligibility at age 65
- Travel and leisure activities with more free time
- Home maintenance if you’re spending more time at home
- Prescription medications and medical care as you age
Calculate a realistic retirement spending baseline that accounts for both expected decreases and increases. This will help you determine how much income you’ll need from Social Security and other sources to maintain your desired lifestyle.
4. Maximize Your Savings While Still Working
If you haven’t started collecting Social Security benefits yet, continuing to work provides the most reliable opportunity to build your retirement savings. Every additional year of work serves a dual purpose: it adds to your nest egg and can potentially increase your future Social Security benefits.
Social Security calculates your benefit based on your 35 highest-earning years. If you’re still working and earning more than in some of your earlier career years, these higher earnings will replace lower-earning years in the calculation, resulting in a larger monthly benefit when you eventually claim.
Strategies to maximize savings in the years before retirement:
- Maximize retirement account contributions: Take full advantage of contribution limits for 401(k)s, IRAs, and other retirement accounts. For 2026, individuals aged 50 and older can make catch-up contributions.
- Claim employer matching: If your employer offers matching contributions, contribute at least enough to receive the full match—it’s essentially free money.
- Save aggressively: Consider cutting back on nonessential expenses and redirecting that money into savings. With fewer years until retirement, you have less time for compound interest to work its magic, so every dollar counts.
- Consider part-time work: If full-time employment becomes burdensome, explore part-time options that allow you to continue earning and saving while enjoying more flexibility.
The combination of additional savings and potentially higher Social Security benefits makes continuing to work one of the most powerful retirement planning strategies available.
5. Reduce Expenses Before Retirement
The years before retirement offer an ideal opportunity to identify and eliminate unnecessary expenses. Small changes can add up to significant savings that boost your retirement nest egg.
Focus on finding savings that don’t require major lifestyle sacrifices. Often, you can achieve substantial reductions simply by shopping around for better rates on services you already use:
- Insurance policies: According to Consumer Reports, switching car insurance saves consumers a median of $461 annually. Review your home, auto, and life insurance policies to ensure you’re getting competitive rates. Many people remain with the same insurer for years without realizing they could save hundreds by switching.
- Phone and internet plans: Technology companies constantly introduce new plans and promotions. Review your current plans and compare them to competitors. You might find you’re paying for more data or features than you actually use.
- Subscription services: Audit your monthly subscriptions for streaming services, apps, magazines, and memberships. Cancel those you rarely use.
- Utility costs: Simple changes like improving home insulation, using programmable thermostats, and switching to LED lighting can reduce monthly utility bills.
The key is to implement these cost-cutting measures before you retire. This allows you to redirect the savings into your retirement accounts while you’re still earning income, and it helps you become comfortable living on less—valuable practice for retirement budgeting.
6. Consult with a Financial Advisor
Retirement planning involves complex decisions about when to claim Social Security, how to manage retirement accounts, investment strategies, tax implications, and estate planning. A qualified financial advisor can provide personalized guidance based on your unique situation.
Once you’ve calculated your savings, estimated your retirement expenses, and reviewed your anticipated Social Security benefits, it’s time to develop a comprehensive strategy. A financial advisor brings expertise and up-to-date knowledge that can make a significant difference in your retirement security.
What a financial advisor can help you with:
- Optimal claiming strategy: Determine the best age to claim Social Security based on your life expectancy, financial needs, and marital status. For married couples, coordinating claiming strategies can maximize lifetime benefits.
- Investment portfolio optimization: As you approach retirement, your investment strategy should shift to reduce risk. An advisor can help you rebalance your portfolio appropriately, as you have less time to recover from market downturns.
- Tax-efficient withdrawal strategies: Learn how to minimize taxes by strategically withdrawing from different types of accounts (taxable, tax-deferred, and tax-free) in retirement.
- Access to specialized products: Advisors have knowledge of investment and savings vehicles you might not be aware of, including annuities, bond ladders, and other retirement income strategies.
- Healthcare and Medicare planning: Navigate the complex world of Medicare enrollment, supplemental insurance, and healthcare costs in retirement.
Look for a fee-only fiduciary advisor who is legally required to act in your best interest. This ensures you receive unbiased advice rather than recommendations driven by commission incentives.
Bonus: Monitor Your Finances Continuously
Whether you plan to collect Social Security next week, next month, or in ten years, maintaining vigilant oversight of your finances is essential. Your financial situation isn’t static—it requires regular monitoring and adjustments.
Keep track of your total savings and calculate how long they will last based on your projected monthly withdrawals. Update these calculations regularly as your circumstances change. Markets fluctuate, expenses vary, and life brings unexpected costs. Building flexibility into your plan and reviewing it periodically ensures you can adapt to whatever comes your way.
Plan based on realistic numbers, not wishful thinking. It’s better to be pleasantly surprised by having more money than expected than to run short in your later years when you have fewer options to generate additional income.
Understanding the Benefits of Waiting
While this article focuses on what to do while waiting to claim Social Security, it’s worth understanding why waiting can be advantageous:
For those born in 1960 or later with a full retirement age of 67, claiming at age 62 results in a permanent 30% reduction in benefits. Claiming at age 65 means roughly a 13.34% reduction. However, if you can afford to wait until age 70, your benefits increase by 8% per year beyond full retirement age—a total increase of 24% compared to claiming at 67.
These adjustments aren’t small numbers. The difference between claiming at 62 versus 70 can mean receiving nearly 77% more per month for the rest of your life. For someone entitled to $2,000 monthly at full retirement age, this could mean the difference between receiving $1,400 at age 62 or $2,480 at age 70.
The decision of when to claim depends on your life expectancy, financial needs, health status, and whether you have a spouse whose survivor benefits you need to consider. But for those who can afford to wait, the financial rewards can be substantial.
Taking Action Today for a Secure Tomorrow
Waiting to claim Social Security until age 65 or later can significantly increase your lifetime benefits, but this strategy only works if you’re financially prepared to bridge the gap. The six steps outlined in this guide—reviewing your Social Security statement, understanding your income needs, creating a retirement budget, maximizing savings, reducing expenses, and consulting with a financial advisor—provide a comprehensive framework for preparation.
The years leading up to retirement are crucial for financial preparation. Every month you delay taking action is a missed opportunity to build savings, adjust your budget, or optimize your investment strategy. Start implementing these steps today, even if retirement seems distant. The more prepared you are, the more flexibility you’ll have when it’s time to make the Social Security claiming decision.
Remember, Social Security was designed as a safety net and foundation for retirement income, not as your sole source of support. Building a comprehensive retirement plan that includes multiple income streams alongside Social Security gives you the financial freedom and peace of mind to truly enjoy your retirement years.