Simply Money

Simply Money

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How to get the most out of your future Social Security benefit

The sky is falling! The sky is falling!

It seems as though everyone who talks about Social Security is a “chicken little.” All the information you hear is nothing but doom and gloom. Some of the information may be accurate, but it can be hard to tell what’s real, what’s blown out of proportion, or what’s even so-called “fake news.”

According to the recent Social Security Board of Trustees Report just published, Social Security benefits will continue to pay out in full until 2034. After 2034, if no changes are made to the program, Social Security will be able to pay out 77% of benefits to beneficiaries. So this would mean, for example, that if you’re expecting a $1,500 a month benefit in retirement, you would only get $1,155. When there are talks about the Social Security ‘trust fund’ going bankrupt, it’s not the same as an individual’s bankruptcy. This is because when older generations retire, their children and grandchildren will still pay a payroll tax to support their benefits. Simply put, Social Security should be around – in some form or another - for decades to come.

Simply Money Advisors believes that you should continue to include Social Security in your personalized financial plan. Social Security was designed to be a form of insurance, not a retirement plan, meaning it’s meant to protect you from the risk of outliving your savings. With that in mind, here are a few ways to make the most of your future benefit:

Understand what you’re eligible for in advance

No matter your age, Simply Money Advisors recommends creating a “My Social Security” account on the Social Security Administration’s website at This will give you access to all of your earnings and benefit information. Many people have no idea how Social Security is calculated or what they’re going to get during retirement. By creating an account, you can see your work history and what benefits you and your family are eligible for.

Understand the perks of waiting to take your benefits

Many people think that they need to take Social Security as soon as possible in order to receive the maximum amount, so they take it early at age 62 (the earliest possible age you can start claiming). But understand that if you do take it early, your monthly benefit will be permanently reduced – in many cases, by 30% for the rest of your life.

This is why, at Simply Money Advisors, we believe in waiting as long as you can to claim. Realize this: for every year you wait to claim past your “full retirement age” (usually age 66 or 67), your monthly benefit will actually increase by 8% for each of those years up until age 70. This strategy will give you more money in your later years; a sort of “cushion” if you’re worried about outliving your savings.

Work as long as you can 

Your Social Security benefit is based on your highest 35 years of income. If you have not been in the workforce for 35 years, it may be beneficial to continue working longer. Not only will this increase your benefit, but it will also help with your retirement savings and financial plan as well. Hopefully, your income has increased in the last 35 years, and you want to make sure you receive the highest benefit you can from Social Security.

If you have worked less than 35 years, zeros will be accounted for in those years that you did not work. This could extremely lower your average. In this case, any income (such as a part-time income) is better than no income.

Do your research 

Social Security can be very confusing. There are a lot of different strategies for taking your benefit. By researching your specific situation, you can make a more informed decision when you decide to apply for your benefits. The Social Security’s “FAQ” portion of its website is a good starting point. By planning now, you’ll be better prepared for the future.

The Simply Money Point

Educate yourself on your Social Security status. Register for a “My Social Security” account to review your income history and how many years you have worked. This information is extremely important to the calculation of your benefits. Work with your trusted financial planner (preferably a Certified Financial Planner™) to decide the best time to apply for Social Security and how it will affect your personalized financial plan.

Want to learn how your future Social Security benefit works into your retirement plan? We invite you to speak with our team at Simply Money Advisors.

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