When Should I Claim Social Security? A Guide for New Jersey Pre-Retirees

The question of when to claim Social Security is one of the most consequential financial decisions you will make in retirement. The difference between claiming at 62 and waiting until 70 can mean hundreds of thousands of dollars over your lifetime.

There is no single right answer. The timing that works for you depends on your health, your other income sources, whether you are still working, and how your Social Security fits into your broader retirement income plan. This guide walks through the key factors to consider.

How Your Benefit Changes Based on When You Claim

Your Social Security benefit is calculated based on your 35 highest-earning years. The Social Security Administration assigns you a Primary Insurance Amount (PIA), which is the monthly benefit you would receive at your full retirement age (FRA). For anyone born in 1960 or later, the FRA is 67.

Claiming earlier or later than your FRA changes the amount you receive:

Sources: Social Security Administration. Maximum benefits assume maximum taxable earnings over 35 years. Average benefit is the January 2026 average for retired workers.

Each year you delay past your FRA adds 8% to your benefit through delayed retirement credits. Benefits do not increase further after age 70. Each year you claim before your FRA reduces your benefit by approximately 6.67% per year for the first three years and 5% per year beyond that.

The Break-Even Question

A common way to think about claiming age is the “break-even” point: the age at which the total benefits received from a later claiming age overtake the total from an earlier claiming age. For most people, the break-even between claiming at 62 versus 67 falls around age 78 to 80, and between 67 versus 70 falls around age 82 to 83.

If you live beyond the break-even age, delaying pays off. If you do not, earlier claiming would have produced more total income. Of course, no one knows exactly how long they will live, which is why health and family history are important inputs.

Beyond break-even: The break-even calculation does not account for the value of a larger monthly check as a hedge against longevity risk. A higher monthly benefit can be especially valuable in your 80s and 90s when other income sources may have diminished and healthcare costs tend to rise. Think of delayed Social Security as a form of longevity insurance.

What Happens If You Claim While Still Working

If you claim Social Security before your FRA and continue to earn income from work, the Social Security earnings test may reduce your benefits:

• Before FRA: $1 in benefits is withheld for every $2 earned above the annual limit ($23,400 in 2025, adjusted annually).
• In the year you reach FRA: $1 in benefits is withheld for every $3 earned above a higher limit ($62,160 in 2025), but only for months before your birthday.
• After reaching FRA: No earnings test applies. You can earn as much as you want without any benefit reduction.

The withheld benefits are not lost permanently. Once you reach your FRA, the SSA recalculates your monthly benefit to credit you for the months benefits were withheld. However, in the short term, claiming early while working can mean receiving little or no Social Security income.

Spousal and Survivor Benefits

Social Security is not just about your own work record. If you are married, divorced, or widowed, additional benefit options may apply:

Spousal Benefits

• A spouse can receive up to 50% of the higher earner’s PIA, even if the spouse has little or no work history of their own.
• The higher earner must have filed for their own benefits (or be at least 62 with the spouse divorced for 2+ years) before spousal benefits can begin.
• Claiming spousal benefits before the spouse’s own FRA reduces the amount.

Divorced Spouse Benefits

• If your marriage lasted at least 10 years and you are currently unmarried, you may claim on your ex-spouse’s record.
• Your ex-spouse does not need to know or consent, and your claim does not reduce their benefit or their current spouse’s benefit.

Survivor Benefits

• A surviving spouse can receive up to 100% of the deceased spouse’s benefit if claimed at the survivor’s full retirement age.
• Survivor benefits can begin as early as age 60 (or 50 if disabled).
• This is one reason delaying can be valuable for the higher earner in a couple: a larger benefit provides more income to the surviving spouse.
• Remarriage after age 60 does not disqualify you from survivor benefits.

Spousal and survivor strategies can significantly change the math on when each spouse should claim. For couples, this is often one of the most impactful areas of retirement income planning.

The New Jersey Tax Advantage for Social Security

New Jersey does not tax Social Security benefits at the state level. This sets it apart from several other states and is a meaningful advantage for NJ retirees who rely on Social Security for a significant share of their income.

However, Social Security may still be partially taxable at the federal level. Up to 85% of your Social Security benefits can be subject to federal income tax, depending on your combined income (adjusted gross income + nontaxable interest + half of your Social Security benefits). For a detailed look at how New Jersey taxes retirement income, see our New Jersey Retirement Tax Guide.

Because Social Security is exempt from NJ state tax but other retirement income is not, the relative tax efficiency of Social Security income is higher for NJ residents than in states that tax everything uniformly. This can influence the order in which you draw from different income sources. For more on that topic, see our guide on Tax-Efficient Retirement Withdrawal Strategies for New Jersey Residents.

Factors That May Point Toward Claiming Early

• You need the income. If you have stopped working and have limited savings or other income to cover expenses, Social Security may be necessary to meet basic needs.
• Health concerns. If you have a serious health condition or a family history of shorter life expectancy, claiming earlier may result in more total lifetime benefits.
• You have a lower-earning spouse. In some cases, the lower earner claims early to provide household income while the higher earner delays to maximize the larger benefit (and the eventual survivor benefit).

Factors That May Point Toward Delaying

• You are in good health. If you have reason to expect a longer-than-average lifespan, the larger monthly benefit from delaying tends to pay off.
• You are still working. If you are earning a good income through your 60s, claiming early means benefits may be withheld due to the earnings test. Delaying avoids this and builds a larger future benefit.
• Spousal or survivor planning. If you are the higher earner in a couple, delaying can provide a larger survivor benefit to your spouse.
• Roth conversion window. The years between retirement and Social Security claiming can be a lower-income period ideal for Roth conversions. Delaying Social Security keeps your income lower during these years, potentially saving on taxes.
• NJ pension exclusion management. Because Social Security is not taxed in NJ, it does not count toward the $150,000 pension exclusion threshold. Relying more on Social Security and less on IRA withdrawals can help you stay below that cliff.

Common Mistakes With Social Security Timing

• Claiming early “because it might run out.” While the Social Security trust fund faces long-term funding challenges, the Social Security Board of Trustees projects that even if no legislative changes are made, benefits would be reduced to about 79% of scheduled amounts, not eliminated. Claiming early out of this fear often costs more in reduced lifetime benefits.
• Not coordinating with a spouse. Each spouse’s claiming decision affects the other, especially through survivor benefits. Making these decisions independently can leave money on the table.
• Ignoring the tax picture. Social Security income interacts with RMDs, Roth conversions, and other income sources. The timing of your claim should fit within a broader tax and withdrawal strategy. See our RMD guide for more on how distributions affect your tax picture.
• Not checking your earnings record. Your benefit is based on your 35 highest-earning years. Review your Social Security statement to make sure your earnings history is accurate and to see your estimated benefits at different ages.

How the Team at GPS Wealth Management Can Help

Social Security timing is not a decision to make in isolation. It connects to your overall retirement income plan, your tax strategy, your healthcare timeline, and your legacy goals. The team at GPS Wealth Management works with pre-retirees and retirees throughout South Jersey to model different claiming scenarios and find the approach that fits each client’s situation.

To start the conversation, contact the team at GPS Wealth Management for an introductory meeting. There is no cost or obligation for the initial consultation.