Definition

Social Security provides monthly retirement benefits funded by payroll taxes over your working life. The benefit is based on your highest-earning years, and the age you claim — anywhere from 62 to 70 — changes the amount: claiming earlier reduces it, while waiting past full retirement age increases it by roughly 8% per year up to 70.

1. Social Security Claiming Strategies: When to Claim for Maximum Benefit

   Claiming Social Security at the wrong age can cost you tens of thousands of dollars over your retirement. Here is how to think through the optimal claiming strategy for your situation.
   retirement

1. Full Retirement Age (FRA)

   The age at which you qualify for 100% of your Social Security benefit.
2. 4% Rule

   A guideline that withdrawing about 4% of a portfolio in year one is likely to last 30 years.
3. Totalization Agreement

   A treaty preventing double Social Security taxation between two countries.