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For many retirees, Social Security is the foundation of their retirement income. While it was never designed to replace a full paycheck, the timing and strategy behind when and how you claim benefits can have a meaningful impact on your long-term financial security. As we head into 2026, changes to Medicare premiums and cost-of-living adjustments (COLAs) make it even more important to understand how Social Security fits into your broader financial plan.
This article outlines key strategies to help you maximize your Social Security benefits and highlights how rising healthcare costs intersect with retirement income.
Understanding Your Claiming Options
One of the most important decisions you will make is when to claim Social Security.
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- Early claiming (age 62): You can begin benefits as early as age 62, but doing so permanently reduces your monthly benefit. For many people, this reduction can be 25–30% compared to full retirement age benefits.
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- Full Retirement Age (FRA): FRA depends on your birth year and ranges from age 66 to 67. Claiming at FRA allows you to receive 100% of your earned benefit.
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- Delaying benefits (up to age 70): For each year you delay claiming beyond FRA, your benefit increases by approximately 8% per year. This can significantly boost lifetime income, especially for individuals who expect to live longer or who want to maximize survivor benefits for a spouse.
The right claiming age depends on health, longevity expectations, employment status, and whether you have other income sources available.
Coordinating Social Security with Other Income
Social Security should not be viewed in isolation. How it works alongside your other income sources can affect taxes, cash flow, and long-term sustainability.
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- Work income: If you claim benefits before FRA while still working, earnings above certain limits may temporarily reduce your Social Security payments.
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- Retirement accounts: Coordinating withdrawals from IRAs, 401(k)s, or brokerage accounts can help manage taxes and allow you to delay Social Security longer.
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- Roth conversions: Some retirees strategically delay Social Security while converting traditional retirement assets to Roth accounts in lower tax years, reducing future required minimum distributions.
A coordinated income strategy can help smooth cash flow and reduce unnecessary taxes over time.
Spousal and Survivor Strategies
Married couples, divorced individuals, and widows or widowers have additional options that are often overlooked.
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- Spousal benefits: A lower-earning spouse may be eligible for up to 50% of the higher earner’s benefit at FRA.
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- Survivor benefits: Delaying benefits can significantly increase the income available to a surviving spouse later in life.
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- Divorced spouses: If you were married for at least 10 years and are currently unmarried, you may be eligible for benefits based on a former spouse’s record.
These strategies can materially impact household income and should be reviewed carefully before claiming.
The Impact of Medicare Costs in 2026
As retirement benefits increase, so do healthcare costs—and 2026 is a clear example of how these two forces interact.
Medicare’s standard Part B premium is set to rise 9.7% in 2026, reaching $202.90 per month, marking the first time premiums will exceed $200. The annual deductible is also increasing to $283, up from $257.
Because Medicare Part B premiums are typically deducted directly from Social Security payments, this increase will offset a meaningful portion of next year’s 2.8% Social Security COLA. According to the National Committee to Preserve Social Security and Medicare, the higher premium is expected to absorb roughly one-third of the COLA. For some beneficiaries with lower monthly payments, the increase in healthcare costs may leave little or no net gain at all.
These changes highlight an important planning reality: increases in Social Security benefits do not always translate into increased spending power.
Planning for Net Income, Not Just Gross Benefits
When evaluating Social Security decisions, it is essential to focus on what you actually keep, not just what you receive.
Key considerations include:
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- Medicare premiums and deductibles
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- Income-related Medicare surcharges (IRMAA)
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- Federal and state taxation of Social Security benefits
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- Healthcare and long-term care costs later in retirement
A well-designed plan accounts for these expenses and helps ensure that Social Security supports—not surprises—your retirement lifestyle.
Why Strategy Matters More Than Ever
With rising healthcare costs, longer life expectancies, and increasingly complex rules, Social Security claiming has become a strategic decision rather than a simple age-based choice. The difference between an optimized strategy and a default decision can amount to tens or even hundreds of thousands of dollars over a lifetime.
This is especially true for households:
- With uneven spousal earnings
- Planning for longevity
- Managing significant retirement assets
- Navigating disability or survivor benefits
Special Needs Planning Considerations for Disabled Adult Children
For families with a child with disabilities, Social Security planning takes on added importance particularly when a Disabled Adult Child (DAC) may be eligible for benefits.
A Disabled Adult Child may qualify for Social Security benefits based on a parent’s earnings record if the disability began before age 22 and the parent is retired, disabled, or deceased. These benefits can provide long-term income stability, but they are closely tied to Medicare and Medicaid eligibility, making planning critical.
Key considerations include:
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- Timing of parental Social Security claiming: A parent’s decision to claim or delay benefits can directly affect the amount a Disabled Adult Child receives over their lifetime.
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- Medicare coordination: Disabled Adult Children who receive DAC benefits typically become eligible for Medicare after a waiting period, making rising Part B premiums—such as the increases scheduled for 2026—an important budgeting factor.
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- Asset protection: DAC benefits are often paired with means-tested programs like SSI or Medicaid. Improperly titled assets or inheritances can jeopardize eligibility, which is why Special Needs Trusts and ABLE accounts are commonly integrated into the overall plan.
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- Survivor planning: When a parent passes away, DAC benefits increase, reinforcing the importance of coordinating Social Security decisions with estate planning.
For these families, Social Security is not just a retirement benefit—it is a cornerstone of lifetime disability planning that must be aligned with financial, estate, and care decisions.
Final Thoughts
Maximizing Social Security is about more than claiming at the “right” age it is about understanding your options and integrating them into a comprehensive financial plan. As we head into 2026, the interaction between Social Security benefits, disability benefits, and rising Medicare costs reinforces the need for proactive, thoughtful planning.
A personalized strategy can help you make informed decisions, protect critical benefits, and create greater confidence for both retirement and long-term disability support.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
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