Retirement Income Planning
Social Security Optimization in Denver
Social Security optimization is the process of strategically timing when and how you claim benefits to help maximize lifetime retirement income. For Denver pre-retirees and retirees, coordinating claiming decisions with investments, taxes, and estate planning can make a meaningful difference over a retirement that may span decades. This guide walks through 2026 benefit figures, claiming strategies, spousal and survivor options, the earnings test, taxability rules, and how Social Security fits into a coordinated retirement income plan.
2026 Social Security Figures
Key Numbers That Shape Your Claiming Decision
Each year, the Social Security Administration adjusts benefit amounts, earnings limits, and taxable wage bases. Understanding the current figures is the first step in building a claiming strategy. The following data reflects 2026 values published by the SSA as of September 2026.
2.8%
2026 Cost-of-Living Adjustment
$24,480
Annual Earnings Limit (Under FRA)
$184,500
Max Taxable Earnings (OASDI)
~$2,086
Avg Monthly Retired-Worker Benefit
Sources: SSA 2026 COLA Fact Sheet (updated August 25, 2026); SSA Contribution and Benefit Base (updated August 23, 2026); SSA Monthly Statistical Snapshot, July 2026 (updated September 15, 2026).
Understanding Your Options
Claiming Ages: How Timing Affects Your Monthly Benefit
You can claim Social Security retirement benefits as early as age 62 or as late as age 70. Your monthly benefit amount changes significantly based on when you file relative to your Full Retirement Age (FRA). For people born in 1960 or later, FRA is 67, according to the SSA Full Retirement Age FAQ (updated August 26, 2026). Claiming before FRA permanently reduces your benefit. Delaying past FRA increases it through delayed retirement credits, currently 8% per year.
| Factor | Claim at 62 | Claim at FRA (67) | Claim at 70 |
|---|---|---|---|
| Benefit as % of PIA | Approximately 70% | 100% | Approximately 124% |
| Permanent reduction or increase | Up to 30% reduction | No adjustment | 24% increase (8% per year) |
| Earnings test applies | Yes | Only in year FRA is reached | No |
| Spousal benefit eligibility | Reduced if claimed early | Up to 50% of spouse's PIA | Own benefit maximized first |
Exact percentages depend on birth year and individual earnings history. The SSA calculates your Primary Insurance Amount (PIA) using your 35 highest-earning years, adjusted for inflation. Figures shown reflect FRA of 67 for individuals born in 1960 or later. Delaying benefits beyond age 70 does not provide additional increases.
Benefits for Couples and Survivors
Spousal and Survivor Benefits
Social Security offers benefits beyond your own earnings record. Spousal benefits may allow a lower-earning spouse to receive up to 50% of the higher-earning spouse's PIA at full retirement age. Survivor benefits may allow a widowed spouse to receive up to 100% of the deceased spouse's benefit amount, including any delayed retirement credits the deceased spouse had earned.
For couples, coordinating when each spouse claims can meaningfully affect household lifetime income. For example, a higher-earning spouse delaying to age 70 may increase both their own monthly benefit and the potential survivor benefit, since survivors receive the higher of the two benefit amounts.
Strategies No Longer Available
File-and-suspend, which allowed a worker to file for benefits and then suspend them so a spouse could claim spousal benefits, was eliminated by the Bipartisan Budget Act of 2015. Voluntary suspension is generally no longer available for people who had not already filed and suspended by April 30, 2016.
Restricted application, which allowed someone to claim only spousal benefits while delaying their own, is available only to individuals born before January 2, 1954.
These changes mean today's claiming strategies focus on timing, spousal coordination, and survivor planning rather than advanced filing maneuvers. Working with a CFP® professional may help you evaluate which approach suits your circumstances, though individual results vary.
The Earnings Test
Working While Claiming: How Earnings Affect Benefits
If you claim Social Security before reaching full retirement age and continue to work, the retirement earnings test may reduce your benefits. The SSA withholds a portion of your monthly benefit based on how much you earn above set limits. Once you reach FRA, there is no earnings limit, and withheld benefits are credited back through an upward adjustment to your monthly amount.
Under Full Retirement Age for All of 2026
If you will be under FRA for the entire year, the SSA withholds $1 in benefits for every $2 you earn above the annual limit of $24,480 (approximately $2,040 per month). If your earnings exceed this threshold, your monthly benefit may be reduced or paused until the withheld amount is recovered.
In the Year You Reach Full Retirement Age
In the calendar year you reach FRA, a higher limit applies: $65,160 annually (approximately $5,430 per month). The SSA withholds $1 for every $3 earned above this limit, but only for months before you attain FRA. Starting with the month you reach FRA, there is no earnings limit for the remainder of the year.
After Full Retirement Age
Once you reach FRA, you can earn any amount without affecting your Social Security benefits. Additionally, the SSA recalculates your benefit to account for any months in which benefits were withheld due to the earnings test, which may result in a higher monthly payment going forward.
Source: SSA 2026 COLA Fact Sheet (updated August 25, 2026).
Federal and State Tax
Taxability of Social Security Benefits
Up to 85% of your Social Security benefits may be subject to federal income tax, depending on your "combined income," which is your adjusted gross income plus nontaxable interest plus half of your Social Security benefits. The thresholds that determine how much of your benefit is taxable have not been adjusted for inflation since they were established, meaning more retirees may find their benefits taxable over time.
Colorado provides additional relief at the state level. For tax year 2026, taxpayers age 65 or older may subtract the full amount of federally taxable Social Security benefits from Colorado taxable income. Taxpayers ages 55 through 64 may also subtract the full amount if their federal adjusted gross income is at or below $75,000 for single filers or $95,000 for joint filers. For those above those income thresholds, a general subtraction cap of $20,000 applies. This information is based on the Colorado Department of Revenue's guidance updated as of March 4, 2026, and we recommend confirming current rules with a qualified tax professional, as provisions may change.
Coordinating tax planning in Denver with your Social Security strategy may help you manage the tax impact of withdrawals from retirement accounts and Roth conversions alongside your benefits. Higher income may also raise your Medicare Part B premiums, which are typically deducted from your Social Security benefits.
| Filing Status | Combined Income Below | Taxable Portion |
|---|---|---|
| Single, Head of Household | $25,000 | Generally not taxable |
| Single ($25,000 to $34,000) | $25,000 to $34,000 | Up to 50% may be taxable |
| Single (above $34,000) | $34,000 and above | Up to 85% may be taxable |
| Married Filing Jointly | $32,000 | Generally not taxable |
| Married Joint ($32,000 to $44,000) | $32,000 to $44,000 | Up to 50% may be taxable |
| Married Joint (above $44,000) | $44,000 and above | Up to 85% may be taxable |
Federal thresholds based on Congressional Research Service, "Social Security Benefit Taxation Highlights" (updated August 26, 2026) and IRS guidance. Colorado information based on Colorado Department of Revenue, "Income Tax Topics: Social Security, Pensions and Annuities" (updated March 4, 2026). "Up to 50%" and "up to 85%" refer to the maximum portion of benefits includable in taxable income, not the tax rate itself.
The Bigger Picture
Fitting Social Security Into a Coordinated Retirement Income Plan
Social Security is one piece of a larger retirement income picture. A coordinated approach considers how your claiming decision interacts with pension income, withdrawals from tax-deferred and tax-free accounts, investment portfolio distributions, and required minimum distributions. The goal is to build a sustainable income stream that accounts for taxes, longevity risk, and the possibility of long-term care needs.
Withdrawal Sequencing
The order in which you draw from taxable, tax-deferred, and tax-free accounts may affect your tax burden and how long your portfolio lasts. Coordinating withdrawals with Social Security timing is designed to help manage taxable income across years, though outcomes vary based on individual circumstances.
Long-Term Care Considerations
Long-term care costs can significantly affect retirement income sustainability. Social Security provides a floor of guaranteed income, but it may not cover extended care expenses. Long-term care planning alongside Social Security strategy may help address this gap.
Estate and Survivor Coordination
For married couples, the higher earner's claiming decision directly affects the survivor's benefit. Coordinating Social Security with estate planning strategies and beneficiary designations may help protect a surviving spouse's income. These decisions interact with Colorado estate planning tools such as wills and trusts.
A holistic plan also connects Social Security decisions to your broader retirement planning in Denver, including investment management, insurance coverage, and tax strategy. When these elements work together, you have a clearer view of how each decision ripples through your financial picture.
Key Coordination Questions
- 1 How does your claiming age affect your spouse's survivor benefit?
- 2 Will withdrawals from retirement accounts push more of your Social Security into taxable territory?
- 3 Does delaying benefits to 70 align with your longevity expectations and portfolio sustainability?
- 4 How might estate planning in Colorado Springs or Denver interact with your claiming timeline?
Your Guiding Team
Social Security Planning With The Stellarix Group
At The Stellarix Group, we help Denver-area pre-retirees and retirees navigate Social Security claiming decisions as part of a comprehensive financial plan. Our team brings credentials including CFP®, CFA, ChFC, CLU, CIMA®, AIF®, and CLTC® to the planning process, offering perspective across investments, taxes, insurance, and estate strategy.
Ryan Griffin, CFP®, serves as our Financial Planning Manager, guiding clients through retirement income modeling and claiming strategy analysis. Joy Avedesian, CLTC®, our Managing Partner, brings long-term care planning expertise that connects Social Security decisions to the potential costs of extended care. Melissa Lang, CLU, ChSNC, CLTC, also holds the CLTC® designation, supporting families with complex planning needs.
As a fee-based firm affiliated with MML Investors Services and MassMutual, we coordinate Social Security optimization with fee-based financial planning in Denver, serving clients in all 50 states from our Denver office. We work alongside your attorney and CPA to help ensure your claiming strategy aligns with your full financial picture, though we do not provide legal or tax advice directly.
What Our Social Security Planning Addresses
Breakeven analysis comparing claiming at 62, FRA, and 70 based on your projected longevity and income needs
Spousal and survivor benefit coordination for married couples
Tax-aware withdrawal sequencing that considers how retirement account distributions affect Social Security taxability
Integration with retiree-focused planning, including investment management and long-term care strategy
Frequently Asked Questions
Social Security Questions Pre-Retirees Ask Most
These answers reflect 2026 SSA rules and figures. For personalized estimates, we recommend creating a "my Social Security" account at ssa.gov and working with a qualified financial planner.
How Much Social Security Would I Get if I Make $70,000 a Year?
Your Social Security benefit is not based on your current salary alone. The SSA calculates your benefit using your 35 highest-earning years, adjusted for inflation through indexing factors, and then applies a formula with bend points to determine your Primary Insurance Amount. Someone earning $70,000 annually for most of their career may receive a benefit above the current average of approximately $2,086 per month (as of July 2026, per the SSA Monthly Statistical Snapshot), but the exact amount depends on your complete earnings history, the age at which you claim, and your year of birth. You can view your personalized estimate by creating a "my Social Security" account at ssa.gov.
Can I Draw Social Security at 62 and Still Work?
Yes, you can claim Social Security at 62 and continue working, but the retirement earnings test may reduce your benefits. In 2026, if you are under full retirement age for the entire year, the SSA withholds $1 for every $2 you earn above $24,480. In the year you reach FRA, the limit rises to $65,160, with $1 withheld for every $3 above that threshold, applicable only before the month you attain FRA. After reaching FRA, there is no earnings limit. Benefits withheld due to the earnings test are not permanently lost; the SSA recalculates your benefit at FRA to account for the months benefits were withheld, which may increase your monthly payment going forward.
How Much Do You Have to Make to Get $3,000 a Month in Social Security?
Receiving $3,000 per month in Social Security requires a substantially higher-than-average earnings history. The average monthly benefit for retired workers was approximately $2,086 as of July 2026, according to the SSA. To receive $3,000 monthly, you would generally need to have earned near or above the maximum taxable earnings base, which is $184,500 in 2026, for most of your 35 highest-earning years, and you would likely need to delay claiming until age 70 to capture delayed retirement credits. The exact earnings level depends on your year of birth, indexing factors, and the age at which you claim.
What Is the Average Social Security Check for Someone With a $50,000 Salary?
There is no direct salary-to-benefit lookup because Social Security uses your 35 highest years of indexed earnings, not a single year's salary. However, as a reference point, the average monthly retired-worker benefit was approximately $2,086 as of July 2026, per the SSA Monthly Statistical Snapshot. A worker with a long career at approximately $50,000 per year (in inflation-adjusted terms) may receive a benefit near or somewhat below that average, but the precise figure depends on the complete earnings record and claiming age. For an accurate estimate, check your Social Security statement through your "my Social Security" account at ssa.gov.
How Much Social Security Will I Get if I Make $60,000 a Year at 62?
Claiming at 62 reduces your benefit by up to 30% compared to waiting until full retirement age (67 for those born in 1960 or later). If your full retirement age benefit would be, for example, approximately $2,000 per month, claiming at 62 could reduce it to approximately $1,400 per month, before any earnings test adjustments. The actual amount depends on your complete 35-year earnings history. A worker earning $60,000 for most of their career may have a PIA near the national average or somewhat above, but claiming early applies a permanent reduction. Additionally, if you continue working at $60,000 while claiming at 62, the 2026 earnings test would likely withhold a significant portion of your benefit, since $60,000 exceeds the $24,480 annual limit by $35,520, resulting in approximately $17,760 in withheld benefits for the year.
One Star to Guide the Way
Plan Your Social Security Strategy With a CFP® Professional
Your Social Security decision may be one of the most consequential retirement choices you make. Our CFP® and CLTC® credentialed team can help you evaluate claiming strategies in the context of your full financial picture, from investments and taxes to long-term care and estate planning. Serving Denver, Colorado, and clients nationwide.
2000 S Colorado Blvd, Tower 2, Ste 800, Denver, CO 80222