There are a lot of people who will tell you that Social Security is on the verge of going bankrupt. Thankfully, that's far from true.
Not only is Social Security alive and well, but you may be in line for a pretty generous monthly benefit if you're thinking of filing in 2026. Before you do, though, it's important to know the rules. Here are three in particular to be mindful of.
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1. What claiming early means for your benefits
If you'll be at least 62 in 2026, then you're eligible to sign up for Social Security benefits. But it's important to understand what filing early means for your retirement finances.
You're eligible for your Social Security benefits without a reduction once you reach full retirement age. For each month you file early, those benefits are permanently reduced.
If your full retirement age is 67 and you claim Social Security at 62, you'll be looking at about a 30% reduction in payments. So if you're entitled to $2,000 a month at full retirement age, signing up at 62 would mean accepting a $1,400 monthly benefit instead.
If you're thinking of claiming Social Security early, it's important to run the numbers and make sure that's a hit you can afford. For example, let's say you expect to need $4,000 a month in retirement to cover your expenses, and your savings will give you access to $3,000 a month. In that case, there's no problem getting $1,400 a month from Social Security.
However, let's say you need that $4,000 monthly income and you can only expect to get about $2,500 from your savings. If so, filing at 62 will leave you a little bit short.
2. How delayed retirement credits work
While waiting until full retirement age allows you to claim your Social Security benefits without a reduction, you don't have to sign up at that point. If you wait, you can accrue delayed retirement credits that could make your life much easier in the long run.
Social Security's delayed retirement credits are worth 8% for each year you postpone your claim past full retirement age. However, there are some rules to follow.
First, those credits run out once you turn 70. So at that point, there's no sense in delaying your claim further.
Also, delayed retirement credits do not apply to spousal benefits. They only apply to benefits you're claiming on your own earnings record.
But going back to our example, say you're eligible for $2,000 a month in Social Security at age 67. If you wait until 70 to sign up, you could be looking at $2,480 a month instead. That's an extra $5,760 a year every single year of retirement.
But wait -- it gets better. Social Security benefits are also eligible for a cost-of-living adjustment each year. The larger your monthly checks are to begin with, the more those annual boosts will benefit you.
3. How survivor benefits work
When thinking about Social Security, it's important to consider whether your monthly benefits might one day turn into survivor benefits for your spouse. This may end up being the case if your spouse is a lot younger than you and you earned a lot more money than they did.
Social Security will pay your surviving spouse the same monthly benefit you're eligible for. So if you lock in a $2,000 monthly benefit, your spouse will be entitled to a $2,000 monthly survivor benefit.
For this reason, it's important to consider your filing age carefully. You may think you'll be fine claiming Social Security early and reducing your monthly benefits. But remember, that could leave your spouse with a much lower survivor benefit.
The more you know about Social Security before you file, the easier it might be to make a smart decision about when to take benefits. Read up on the program's rules carefully, especially if you're thinking of signing up at some point in the new year.
