There’s a common misconception among wealthy retirees about Social Security claiming. Many think that it doesn’t matter much because it’s just a small part of their overall portfolio and they don’t need to rely on it for everyday expenses. But high-net-worth retirees can still benefit from certain Social Security planning strategies.
Even if you don’t need the income to survive, the program is important because it is one of the few sources of guaranteed, inflation-adjusted lifetime income, and because it offers spousal protection that often is more than other alternatives on the private market. Including claiming decisions in your broader wealth management plan can add flexibility as you work toward your goals.
Knowing when to claim Social Security
As a high-income retiree, you have some flexibility around the age at which you claim Social Security. Each option has its own benefits and downsides to consider.
Claiming at 62
Claiming Social Security benefits at age 62 is usually not considered a good idea for high earners. Claiming at this age gives you money in your pocket sooner but lowers your monthly check from the Social Security Administration and may also lower survivor benefits for your spouse. Also, if you are under full retirement age for the entire year, Social Security deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2026, that limit is $24,480.
For some retirees, claiming earlier may make more sense depending on your health, family history, cash flow needs, and overall financial picture. If someone has a shorter life expectancy, needs more liquidity, or wants to avoid drawing too heavily from investment accounts, the value of receiving benefits sooner may outweigh the advantage of a larger monthly payment later. The best claiming age depends on the individual situation.
Claiming at Full Retirement Age (FRA)
Claiming at retirement age, or 65, means you receive your full Social Security benefit and avoid the permanent reduction in benefits that you would see if you claimed early. For many retirees, it's a middle-ground strategy that balances the desire for current income with the goal of maximizing monthly benefits. For affluent retirees, FRA is often less about maximizing lifetime benefits and more about coordinating Social Security with other income sources, tax planning, and estate planning goals.
Delaying until 70
Social Security benefits are based on your highest 35 years of earnings. Continuing to work after a large income increase may boost your future benefit if those earnings replace lower-earning years in your record. (Check your information online at www.ssa.gov/myaccount/.)
In these cases, if you have many assets available, you can draw from retirement accounts or other accounts to delay claiming Social Security. If you can wait until you’re 70, you can take advantage of certain benefits. Each year you delay benefits beyond your full retirement age, you earn delayed retirement credits that increase your future monthly benefit. That gives you a much higher guaranteed income stream for life, helping provide more inflation-adjusted income throughout retirement. That income can also provide stability during market downturns.
For married couples, delaying can be especially valuable because it also increases the potential survivor benefit, giving a surviving spouse access to a larger monthly payment if the higher-earning spouse passes away first. If you expect to live well beyond the average lifespan, delaying can offer longevity insurance — guaranteed income. A wealth management advisor can help model various scenarios to find what works for you.
Also, remember that retiring doesn't have to mean claiming Social Security immediately. For affluent retirees with substantial savings, delaying benefits while using other assets for income can increase future Social Security payments and create opportunities for tax-efficient strategies that may lower lifetime taxes.
Coordinating benefits for married couples
For married retirees, Social Security claiming decisions should be a household strategy rather than two separate choices. In many cases, the higher earner's decision has the biggest long-term impact because it affects not only their own benefit but also the survivor benefit available to their spouse. If one spouse qualifies for a higher benefit, that higher amount may also determine what the surviving spouse receives later.
Delaying benefits can be especially helpful because it maximizes lifetime household income and offers more financial security for the surviving spouse. When looking at the best approach, consider factors such as age differences, health, income needs, and life expectancy.
Tax planning opportunities before Social Security begins
The years between retirement and claiming Social Security can be a valuable time to plan ahead from a tax perspective. Because up to 85% of Social Security benefits may be taxable for high-income retirees, it can help to make certain moves before those benefits begin:
- Roth conversions may allow you to move money from a traditional retirement account into a Roth IRA during lower-income years, which can reduce taxable income later.
- Capital gains harvesting means intentionally selling appreciated investments in a lower-tax year to manage future tax exposure.
- Withdrawal sequencing is about deciding which accounts to draw from first so you can manage income, taxes, and future Required Minimum Distributions (RMDs).
- Coordinating withdrawals from taxable, tax-deferred, and tax-free accounts can help smooth income over time.
- Managing Medicare premium surcharges, known as Income-Related Adjustment Amount (IRMAA), means watching your income levels so you do not unintentionally trigger higher Medicare costs.
- Charitable giving can also help reduce taxable income, especially once RMDs begin and income may rise.
Exploring these steps can improve tax efficiency while creating more flexibility for how wealth is preserved, transferred, and used in the future.
Incorporating Social Security into overall planning
Social Security should be considered alongside trusts, gifting, estate, and tax planning. The benefits can also play a role in long-term care planning. For example, some retirees use those benefits to help pay premiums for a traditional long-term care policy or a life insurance policy with a long-term care rider. This can create a more tax-efficient source of funds for future care expenses while helping preserve retirement accounts and other investment assets.
For families with larger estates, estate taxes may be a bigger concern than income taxes. In some cases, retirees may choose to claim Social Security earlier and use those payments to fund a life insurance policy held in an irrevocable life insurance trust, or ILIT. This can turn a Social Security income stream into a larger life insurance benefit that may help cover future estate taxes or provide a legacy for heirs or charitable causes.
For high-net-worth retirees, the right claiming strategy can improve lifetime income, enhance survivor benefits, create tax-planning opportunities, and help preserve wealth for future generations. A Social Security advisor can help make Social Security planning for retirement part of a broader wealth management strategy.