You've spent decades in federal service. Now you're 67, and Social Security is sitting there waiting. Do you file now or hold off?
Filing at full retirement age gets you the full benefit you've earned. But if you claimed at 62, that number drops by nearly 30%. Wait until 70, and you're looking at roughly 8% more for every year you delay. The growth stops there, so waiting past 70 doesn't buy you anything.
Here's where it gets tricky. The percentages are easy to find. Figuring out what they mean for your actual life? That takes more work. Your health plays a role. So does your work situation, your pension, and whether your spouse will need that survivor benefit someday.
How Claiming Age Changes Your Check
File at 62, and you're looking at a benefit that's roughly 30% smaller than what you'd get at 67. Hit your full retirement age, and you'll receive your Primary Insurance Amount with no reductions and no bonuses.
Between 67 and 70, benefits increase by roughly 8% per year, with delayed retirement credits capped at age 70. Waiting beyond that point does not increase your benefit.
The Social Security claiming age federal employees choose affects lifetime income far more than most people expect.
Health, Longevity, and Quality of Life
If your health isn't great, or you've got reason to think you won't reach average life expectancy, claiming earlier often makes sense. The same goes if you require the money now and there's no good alternative.
On the flip side, if you're healthy, your family tends to live long, and your spouse might depend on your benefit as a survivor, waiting usually pays off. You're trading a smaller check for more years of payments against a larger check that starts later.
Working While Claiming
Here's where working complicates things. Claim before 67 while making over the limit, and Social Security starts taking back parts of your benefit. You get it back down the road, sure, but dealing with reduced payments in the meantime isn't worth it for most people.
If you're pulling in a decent income and don't actually need Social Security yet, delaying Social Security 8 percent credits can stack up without the earnings test getting in your way.
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Coordinating With FERS/CSRS, TSP, and Spouses
Your Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS) pension already gives you something private-sector retirees rarely have: guaranteed monthly income. That baseline changes everything when you're deciding about Social Security.
Using TSP money while you wait on Social Security makes sense for some people, depending on what the math looks like long-term. If you're married, both of you matter here. The spouse who earns more waits for better survivor protection. The one who earns less filing sooner means bills get paid now.
Taxes, COLAs, and Medicare Considerations
Up to 85% of your Social Security benefits may be taxable, depending on your other income. You'll want to look at your pension, TSP withdrawals, and Social Security together to see where you land tax-wise.
You get cost-of-living bumps no matter when you file. The difference? A higher starting benefit means those adjustments build on a larger number. Watch out for big TSP withdrawals, too. Take out a lot in one year, and Medicare might hit you with the Income-Related Monthly Adjustment Amount (IRMAA) two years later. That can push your Part B premiums way up.
Who Might Delay vs. Who Might Not
Delaying Social Security 8 percent credit typically help healthy retirees, higher earners, married couples focused on survivor protection, and anyone with enough pension or TSP coverage to bridge the gap.
Claiming earlier tends to suit people dealing with health issues, those without much longevity in the family, those with limited savings, or those who just need the cash now.
The Social Security claiming age that federal employees pick isn't about following a rule. It's about how everything else lines up.
Making the Call
There's no magic answer here. Your health, whether you're still working, what your spouse needs, how your pension and TSP fit together, and what your tax picture looks like, all shape whether waiting past 67 actually helps.
For a clear look at how the pieces fit your specific situation, reach out to the team at Serving Those Who Serve at [email protected].
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
