3 factors that could impact Social Security benefits

Due to your age at filing, taxes or Medicare premiums, your actual Social Security benefits may be less than you expect. Learn how you could better prepare for the retirement lifestyle you envision with supplemental guaranteed income that bridges the gap.

Most workers in the U.S. expect Social Security to be a source of income in retirement.¹ At the same time, 46% of workers and 57% of retirees worry that their Social Security benefits may be reduced.² Even if they are not reduced, many may ask themselves if it will be enough in combination with their other retirement savings to allow them to live out their golden years comfortably. It's important to understand how several factors can impact the Social Security benefits you receive each month.

1. Your age when first filing for Social Security benefits

When it comes to Social Security benefits and retirement, age 67 is the new 65. But for many people, delaying retirement until full retirement age or later is not an option. The cost of filing for Social Security early in retirement can be substantial. Generally speaking, the longer you delay receiving Social Security benefits, the higher your monthly benefit. For example, someone filing for Social Security at age 62, prior to full retirement age, may receive $2,100 per month, whereas if they waited until full retirement age of 67, they would receive $3,000 per month. If they delayed filing until age 70, they would receive $3,720 per month. In short, by waiting until full retirement age to file for Social Security, it is possible to increase your monthly benefit.

Possible strategies to maximize Social Security Benefits

Your full retirement age is when you are eligible to receive 100% of your Social Security benefit, but what if you need to retire sooner? Annuities are one option that may help you prepare financially to file for Social Security benefits later, even if you need to retire early.

An annuity is a contract between you and an insurance company that provides a guaranteed income stream in retirement. You pay a premium in exchange for set payments.

Annuities can help in two ways:

In the short term it can help bridge the income gap, enabling you to retire when you want and still postpone filing for Social Security benefits until you reach full retirement age, or even age 70, to maximize your Social Security benefits.
In the long term, it could strengthen your overall retirement strategy by increasing the percentage of your income that is guaranteed for life.

2. Social Security benefits may be taxable

From 2025-2028, according to the Social Security Administration Opens in a new tab, taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers) may not be eligible for an additional deduction that limits tax liability on Social Security benefits. Income from an IRA, pension or other investment may not be taxed as earnings, but may impact how your Social Security benefits are taxed.

3. Medicare Part B premiums are deducted from Social Security benefits

You may be surprised to learn that if you are enrolled in both Social Security and Medicare Part B, your premium may be automatically deducted from your Social Security benefits. That means the government will automatically subtract your Medicare Part B premiums from your monthly Social Secuirty benefit and will deposit the remaining amount in your bank account.

The higher your income from all sources, the more you'll have to pay in Medicare premiums. You can expect your Social Security benefit to be reduced, sometimes by a few thousand dollars annually, depending on your Part B costs.³

Help protect your level of guaranteed income

An annuity with a guaranteed lifetime income benefit that increases over time can help limit the impact of Medicare premium costs. After you start receiving Social Security benefits, payments from an annuity can help cover reductions in your benefits as well as:

Supplement future lifestyle goals
Pay for unexpected health care costs not covered by Medicare
Provide incrementally increasing financial support that keeps up with rising costs of retirement

Ultimately, the annuity you choose could help you maintain — or even increase — your guaranteed income.

Considerations for building predictable income in retirement

Creating a steady, reliable income stream in retirement can help support long-term financial confidence.

An annuity is one option to help supplement your retirement income and help you navigate unforeseen situations. Increasing your guaranteed monthly income can help you prepare for what's ahead, no matter what comes your way.

Protective offers multiple types of annuities based on your needs. Talk with your financial professional to find out if an annuity makes sense for you and your retirement goals.

Explore these additional topics:

Retirement income: Is it taxable?

Sources:

¹ EBRI and Greenwald Research, "2025 EBRI/Greenwald Retirement Confidence Survey," 2025. Opens in a new tab

² EBRI and Greenwald Research, "2025 EBRI/Greenwald Retirement Confidence Survey," 2025. Opens in a new tab

³ Social Security Administration. Opens in a new tab

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As you determine what annuity might be right for you, remember they are intended as vehicles for long-term retirement planning withdrawals reduce an annuity’s remaining death benefit, contract value, cash surrender value and future earnings. Withdrawals from annuities may also be subject to income tax and, if taken prior to age 59 ½, an additional 10% IRS tax penalty may apply. Because Protective and its representatives do not offer legal or tax advice, it is important that you talk with your own legal and tax advisor about your specific tax situation.

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