If you start taking Social Security at age 62, the monthly payout will be much less than if you wait to take it later. If you wait to take it later, you'll get a higher monthly benefit but have fewer months left in your life to enjoy it. Where is the "sweet spot?"

Think of Social security as an annuity you have been investing money into during your working years. But rather than paying to an insurance company, you’ve been paying it to Uncle Sam.

-Foundation for Financial Wellness

Video Transcript

Your Social Security election is one of the most important financial decisions that you’re going to make in your life. Please know that the Foundation for Financial Wellness has created an entire series on the topic of Social Security election because of the importance and because of the comprehensive nature of those decisions that you are going make. It literally plays a part in nearly every retirement planning calculation. I mean, how could you leave it out?

Also, this is one of the most requested conversations for 1:1 counseling sessions. You are entitled to as a student of this course. I’ll always remind you at the end of each lesson.

So first, know that the Social Security Administration (SSA) creates an estimate of how much Social Security you’ll receive during retirement. As of 2011, these statements are no longer mailed to you as hard copies.

Now you’ll need to access your statement online: www.ssa.gov. 

If you are going to take advantage of your 1:1 counseling session, please bring that print off with you. It will help a ton.

Think of Social security as an annuity you have been investing money into during your working years. But rather than paying to an insurance company, you’ve been paying it to Uncle Sam.

At the point of initiating your social security payout, it’s like a SPIA, Single Premium Immediate Annuity, which is indexed for inflation. It has unique tax benefits in that a portion of it might not taxable, and it’s a guaranteed stream of income that you and your spouse cannot outlive! That’s powerful.

I mean just hearing that explanation should give us pause and realize, wow, this is a powerful piece of our retirement income plan!

OK, now a quick review for you to decide - do you have any decisions to make or actions to take?

Number one - Go to www.SSA.gov and pull your social security benefit estimate.

Number two - Pull this information into your retirement plan and schedule a time with your financial planner and / or tax consultant.

Or as always, don’t forget. You can take full advantage of your private counseling session. It’s included. It’s private. It’s confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule your counseling session, simply click on the “Request Counseling” button.