ArcaMax

I write a column similar to this one every January. But I don't mind plagiarizing myself because it contains a very important message for people planning to retire in 2026.

January is a critical month for the hundreds of thousands of potential Social Security beneficiaries who are reaching their full retirement age in 2026. The important message is that all of them should at least consider filing for their benefits this month, even though they may not reach their retirement age until later in the year.

Please note that if you want to delay filing for your Social Security benefits until 70 to get the "delayed retirement credit" of about 24% added to your monthly benefits, then you should forgo the procedure discussed in this column. Also, if you're one of those people who absolutely insist on waiting until your FRA to file for benefits, then forget this column's message.

But if you are open to the possibility of increasing your benefit payout for 2026, you may want to consider filing for benefits in January.

The reason for this early filing timeframe has to do with some quirky and complicated features of Social Security's earnings penalty provisions. Those provisions generally keep seniors who are still working off of Social Security's rolls until they reach that magic full retirement age.

The law essentially states that if you are over 62 but under full retirement age and are still working full-time, you are not eligible for Social Security benefits. Specifically, the rules require that the Social Security Administration deduct $1 from any retirement benefits you might be due for every $2 you earn over $24,480 in 2026.

However, the rules state that once you reach your full retirement age, you are entitled to full Social Security benefits, even if you are still working and regardless of your earnings.

Let's follow an example. Let's say Ed was born in October 1959, which means he'll reach his full retirement age of 66 and 10 months in July 2026. And let's further say Ed generally makes about $100,000 per year and he plans to continue working indefinitely. Based on the earnings penalty rules I briefly outlined above, Ed figures he must wait until July (his full retirement age) to begin collecting his Social Security benefits. As I said, at that magical point, the earnings penalty rules no longer apply and he can get his Social Security. And before that, he's making way more than the $24,480 income threshold.

But here is why Ed should check into applying for Social Security in January. Congress set up a more lenient earnings threshold for the year you reach your full retirement age. Specifically, it says you can earn up to $65,160 between January and the month you reach your full retirement age and still get Social Security benefits. And even if you earn more than $65,160, you lose only $1 from your benefits for every $3 you exceed that threshold.

Let's say Ed is going to make about $50,000 between January and June (i.e., before he reaches the magic age of 66 and 10 months in July). That's under the $65,160 threshold for 2026, which means Ed is due benefits beginning in January. He does NOT have to wait until July to apply for his Social Security checks.

But there is a bit of a catch. By starting his benefits in January, Ed will be accepting a slightly reduced amount. (Benefits are reduced roughly one-half of one percent for each month they are taken before full retirement age.)

If Ed's Social Security benefit at full retirement age is $4,000 per month, let's look at his options.

Ed's first option is to wait until July to start his Social Security benefits. He'll get $4,000 per month for six months or $24,000 for the year 2026.

Ed's second option is to file for Social Security in January. Starting his benefits slightly early, his monthly rate is reduced to about $3,880. That comes out to $46,560 in total benefits for the year 2026. The downside to option two is that his ongoing monthly benefit rate will be $120 less than what he would have been getting in option one. But because he'd be getting about $22,560 less in 2026 benefits if he chose option one, it would take Ed a long time to make up that loss with his extra $120 per month in ongoing benefits.

Even if Ed was going to make more than the $65,160 income threshold between January and June, he would only lose one dollar in Social Security benefits for every three dollars he exceeded that amount. So he still might come out ahead by filing in January.

Please note that this strategy generally only works for those who turn full retirement age in early to mid-2026 and whose earnings before reaching FRA are at least close to the $65,160 limit. In other words, if you will make a lot more than $65,160 before your full retirement age, or if you reach your FRA later in the year, you should probably just wait until your FRA month to file for your Social Security benefits.

And here is one other consideration. If you are waiting until your full retirement age (or even later) to start benefits to give your spouse a higher widow's or widower's benefit when you die, then forget this procedure. And that's because any reduction you take in your retirement rate will carry over to your spouse's eventual survivor's benefit.

I know these rules are complicated, and the math in the examples above might be difficult to follow. But my overall message is easy to follow: If you're reaching your full retirement age in early to mid-2026, you might want to talk to a Social Security representative sometime this month to find out if it's to your advantage to file for your benefits to start in January.

One word of caution. Many readers in the past told me that when they tried to file in January, Social Security Administration representatives told them they could not do so. Sadly, far too many SSA agents are unfamiliar with how these rules work. If you run into the same problem, ask to speak to a supervisor.

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If you have a Social Security question, Tom Margenau has two books with all the answers. One is called "Social Security -- Simple and Smart: 10 Easy-to-Understand Fact Sheets That Will Answer All Your Questions About Social Security." The other is "Social Security: 100 Myths and 100 Facts." You can find the books at Amazon.com or other book outlets. Or you can send him an email at thomas.margenau@comcast.net. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

Copyright 2026 Creators Syndicate, Inc.