Deciding when to claim Social Security retirement benefits is one of the most significant financial choices individuals face. While many wait until they reach Full Retirement Age (FRA) — which ranges between 66 and 67, depending on birth year — some opt to begin receiving benefits earlier.
Claiming at age 64, two to three years before reaching FRA, might be an appealing option for those needing additional income. However, this decision is not without consequences.
Claiming Social Security early impacts more than just the amount of the monthly benefit you’ll receive — it also plays a significant role in tax withholding and how much of your benefits may be subject to federal income tax. This article explores how claiming Social Security at 64 can affect your tax obligations and provides you with strategies to minimize unnecessary taxes.
How Claiming Social Security at 64 Affects Your Benefits and Taxes
Claiming Social Security benefits before your Full Retirement Age (FRA) results in a permanent reduction in monthly payments. At 64, the reduction is around 13.3% compared to what you would receive at your FRA.
This reduction is permanent, meaning you’ll receive a smaller monthly benefit for the rest of your life. While this earlier access to benefits may help you cover living expenses sooner, it’s crucial to understand that claiming at 64 can also affect your tax situation.
If you continue to work or have other sources of income, it may trigger taxes on your Social Security benefits. How much tax you pay depends on your total income, including earnings from jobs, investments, and other retirement savings.
Tax Implications of Early Social Security Claiming
Social Security benefits are taxed based on combined income, which includes:
- Adjusted gross income (AGI)
- Tax-exempt interest (e.g., municipal bonds)
- Half of your Social Security benefits
If your combined income exceeds certain thresholds, a portion of your Social Security benefits may become taxable. Understanding these thresholds is essential to avoiding unexpected tax burdens.
For single filers, the thresholds are:
- No tax on benefits if combined income is below $25,000
- 50% of benefits taxable if combined income is between $25,000 and $34,000
- 85% of benefits taxable if combined income exceeds $34,000
For married couples filing jointly, these thresholds are:
- No tax on benefits if combined income is below $32,000
- 50% taxable between $32,000 and $44,000
- 85% taxable if over $44,000
The portion of your benefits that are taxed is determined by how much your combined income exceeds these thresholds. For many early claimants, this could mean that more of their benefits are subject to taxation, especially if they continue to work or have additional sources of income.
Tax Withholding on Social Security Benefits
While the IRS does not automatically withhold taxes from Social Security benefits, you can request voluntary withholding.
This means that you can ask the Social Security Administration (SSA) to withhold federal income tax directly from your monthly Social Security payments by submitting Form W-4V. This can be an effective way to ensure you’re not hit with a large tax bill at the end of the year.
The withholding rates available are:
- 7%
- 10%
- 12%
- 22%
Having taxes withheld can make tax time easier, especially for those who are unsure of how much they’ll owe in federal taxes. Keep in mind that taxes withheld are based on your current monthly benefits, and if your income situation changes (e.g., if you start working part-time), you may need to adjust your withholding rate.
Earnings Limitations and Social Security Benefits
If you decide to claim Social Security at 64 and continue working, your earnings will affect how much of your benefits you can receive. For 2026, the earnings limit for those claiming before FRA is $21,240 annually.
If you exceed this threshold, the Social Security Administration (SSA) will withhold $1 for every $2 you earn over the limit. This means that if you continue working while receiving Social Security at 64, your monthly benefits will be reduced until you reach your FRA.
However, once you reach FRA, these reductions are reversed, and your benefits will be recalculated based on the number of months you received a reduced benefit.
Spousal Benefits and Early Claiming
Claiming Social Security early at 64 may also affect spousal benefits. If you are married, your spouse may be eligible for benefits based on your earnings record. If you choose to claim early, your spouse’s benefits will also be reduced accordingly.
This is because the amount your spouse receives is directly tied to when you start taking your benefits. If you’re married and considering early claiming, it’s important to assess how this decision may impact your spouse’s retirement plans as well.
Consulting with a financial advisor can help you navigate this complexity and make the best decision for both you and your spouse.
How Your Personal Health and Life Expectancy Affect the Decision
When deciding whether to claim Social Security at 64, it’s important to consider your health and life expectancy. If you are in poor health or have a family history of shorter life spans, claiming early might make more sense financially.
Early access to benefits allows you to maximize your total lifetime Social Security benefits, especially if you do not anticipate living past the age where delayed retirement credits would make a significant difference in your monthly check.
However, if you expect to live a long life and are in good health, delaying benefits until your FRA or even later might be more beneficial, as it would increase your monthly benefit significantly.
Breakeven Analysis: Does Claiming Early Make Sense?
One way to determine if claiming Social Security early is a wise financial decision is to conduct a breakeven analysis. This analysis compares the total benefits you would receive by claiming early versus waiting until your FRA.
For example, if you claim at 64 and your monthly benefit is reduced by 13.3%, it will take several years to make up for the lost benefits from waiting until your FRA. If you live long enough, waiting may yield more in total benefits over the long term.
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Strategies to Minimize Taxes and Maximize Benefits
- Plan for Additional Income: If you continue to work or have other sources of retirement income, be sure to factor these into your overall income plan. Minimizing the combined income can help keep your Social Security benefits from becoming heavily taxed.
- Consider Withholding: To avoid a large tax bill, consider having federal taxes withheld from your benefits by completing Form W-4V. This allows you to manage your taxes more easily throughout the year.
- Evaluate Health and Longevity: If you are in good health and expect to live longer, delaying Social Security until your FRA or even later may be a better option. On the other hand, claiming early could provide immediate relief if health concerns or financial needs require it.
Claiming Social Security at 64 provides early access to benefits but comes with important trade-offs in terms of both the benefit amount and taxes. While early claiming reduces your monthly benefit, it also impacts the taxability of your Social Security income, especially when combined with other income sources.
By understanding how early claiming affects your benefits and taxes, and planning accordingly, you can make a well-informed decision that aligns with your long-term financial goals.
