When I sit down with new clients to discuss their retirement goals, I can almost guarantee we’ll end up having some version of the following conversation:

We start talking retirement numbers, and when I ask about their savings goals, they’ll throw out a figure. Usually, it’s something substantial like $5 million or more.

“That’s what I need to retire comfortably,” they’ll say with conviction.

When I ask how they arrived at that number, the answer usually involves some back-of-the-napkin math about their current lifestyle expenses multiplied by 25, an old rule of thumb that unfortunately doesn’t account for the full picture, especially when it comes to Social Security.

For a number of reasons, Social Security is a blind spot many high-income earners have when planning for retirement. But this blind spot could mean you’re overestimating your nest egg needs by hundreds of thousands or even millions of dollars.

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The Million-Dollar Social Security Benefit

For most of my high-earning clients, Social Security benefits can be worth well over a million dollars in present value terms. Yet when calculating retirement needs, many professionals either discount Social Security benefits entirely or significantly undervalue them.

Let’s break this down with some numbers.

For someone who has consistently earned at the Social Security wage base limit (currently $176,100 in 2025) throughout their career, the maximum monthly benefit at full retirement age (67 for those born in 1960 or later) is around $4,000 in 2025. That’s $48,000 per year.

For a married couple where both spouses spent the majority of their careers earning at or above the wage base limit, this could mean nearly $100,000 annually in guaranteed, inflation-adjusted income.

While those numbers alone may not seem like enough to fund your retirement income needs, it’s important to remember that this income is effectively backed by a $2.5 million asset (assuming a 4% withdrawal rate).

That’s $2.5 million less that you need to save or earn in your portfolio. (And it certainly doesn’t hurt that this asset is backed by the full faith and credit of the U.S. government.)

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Why High Earners Overlook Social Security Strategies

No matter which way you slice it, Social Security benefits can account for a significant portion of your annual retirement income — or at least the amount you would need to save to earn that same income.

With that said, there are several reasons why high earners tend to discount Social Security in their retirement planning:

1. The myth of Social Security’s demise. While the Social Security Trust Funds do face challenges, the system is not going to disappear. Even under the worst-case projections, benefits would be reduced rather than eliminated. The political consequences of allowing Social Security to completely fail would be too severe.
2. The maximum benefit feels small. For someone earning $500,000 or more annually, a benefit of $48,000 per year might seem insignificant. But when you consider the size of the nest egg needed to generate that annual income ($1.2 million), the numbers tell a different story.
3. It’s “too far away.” For younger high earners in their 30s and 40s, retirement can feel distant, and Social Security even more so. This leads to overlooking its impact on retirement calculations.
4. A lack of understanding. The Social Security system is complex, with nuanced rules around spousal benefits, survivor benefits, and claiming strategies that can be difficult to navigate. No wonder people tend not to factor in their benefits!

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Top Social Security Strategies for High Earners

But for high-earning and high-net-worth individuals, strategic Social Security planning still matters. By aligning your claiming strategy with factors like life expectancy and other income sources, you can potentially increase your lifetime benefits by hundreds of thousands of dollars.

Here are some Social Security strategies high earners should consider:

1. Determine Your Optimal Claiming Age

While you can start claiming benefits as early as 62, your monthly benefit increases for each month you delay (for a total of 8% per year) up until age 70. For high earners with longer life expectancies and substantial retirement savings or other income sources, delaying benefits can be the optimal strategy.

For example, claiming at 70 instead of 67 provides approximately 24% more in monthly benefits. Consider Mark, a CFO at a major financial institution. By delaying his benefits from 67 to 70, his monthly benefit increased from $3,800 to about $4,712. Over a 25-year retirement, this decision added more than $273,000 to his lifetime benefits, not accounting for Cost of Living Adjustments (COLAs).

Of course, if Mark’s family history or personal health history indicates he likely won’t live into his 90s, taking Social Security earlier might make more sense. Ultimately, there’s no one-size-fits-all approach to Social Security claiming strategies, as your strategy depends upon a variety of personal factors.

2. Coordinate Spousal Claiming Strategies

For married couples, coordinating claiming strategies can maximize lifetime benefits. This might involve one spouse claiming earlier while the other delays, or both delaying based on your unique circumstances.

I recently worked with a couple (both executives at national banks) where we developed a strategy for the slightly lower-earning spouse to claim at full retirement age while the higher earner delayed until age 70. This approach provided some income earlier in retirement while also maximizing their total lifetime benefits.

3. Consider Roth Conversions Before Claiming Benefits

If you plan to have a retirement income of more than $34,000 as an individual or $44,000 as a married couple — as most of my clients do — you can expect 85% of your benefits to be subject to federal income tax.

By converting portions of your traditional retirement accounts to Roth accounts before Social Security income begins, you can potentially reduce your required minimum distributions (RMDs) later, and thus the chance that you’ll be pushed into a higher tax bracket. This strategy gives you more control over your taxable income throughout retirement.

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Finding Your True Retirement Number

For high-income, high-net-worth professionals, properly accounting for Social Security can significantly impact your retirement planning in several positive ways:

1. Lower savings target: You may need hundreds of thousands or even millions less in your retirement portfolio than you initially calculated.
2. Earlier retirement possibility: With a lower required nest egg, you might reach your retirement goals sooner than expected.
3. Different investment strategy: With guaranteed income from Social Security covering more of your essential expenses, you might have more flexibility in how you invest your portfolio.
4. Improved current lifestyle: Recognizing you need to save less could allow you to enjoy more of your income today.

Of course, Social Security won’t solve all your retirement needs. (Far from it.) But by properly accounting for the present value of your Social Security benefits, you can arrive at a more accurate target for your retirement savings.

When clients ask me, "How much do I really need to retire?", I always remind them that the answer isn't just about a number; it's about understanding all your income sources and how they work together.

This precision can help you make better decisions about saving, investing, and eventually transitioning into retirement.

If you’d like to discuss how optimizing Social Security fits into your retirement planning and get a clearer picture of your true retirement number, let’s talk. We’ll model different Social Security scenarios while taking into account other income sources, estimated longevity, and, most importantly, your goals for retirement. Schedule a free, no-obligation conversation today.

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