Financial Symmetry: Balancing Today with Retirement

When Should You Claim Social Security? 3 Decisions to Consider, Ep #240


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Claiming Social Security as soon as you become eligible at age 62 is a common choice for Americans. While understandable, this decision can have significant, and often underappreciated, long-term consequences. For many, the urge to claim early may stem from financial necessity, lack of other income sources, or simply a desire to “get what you’ve paid for.” However, claiming early can reduce your benefit by as much as 30% compared to waiting until your full retirement age (typically around 67).

If you are in the fortunate position of having other income sources, such as a pension, 401(k), brokerage accounts, or IRAs, delaying Social Security becomes a viable strategy. This moves the decision away from immediate need and toward maximizing lifetime income, building multigenerational wealth, and supporting charitable or legacy goals.

Outline of This Episode
  • [00:00] Most Americans claim Social Security at 62 due to a lack of other income, but those with additional resources or financial advice might delay claiming for long-term wealth planning.
  • [04:16] Consider life expectancy in financial planning, especially for married couples.
  • [08:56] Evaluate claiming benefits at different ages to optimize long-term financial outcomes, considering life expectancy and age gaps between spouses.
  • [11:38] Social Security benefits, combined with other income, affect your tax bracket.
  • [16:00] It’s important to integrate Social Security decisions into your broader retirement plan, considering income sources, tax liabilities, legacy goals, and timing.
  • [17:18] Retirement tax decisions are complex, involve varying tax rates, and impact Social Security timing strategies.

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Financial Symmetry: Balancing Today with RetirementBy Chad Smith, CFP® and Mike Eklund, CFP®

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