The decision of when to take Social Security is one of the biggest that you will face in retirement. Many people turn to Social Security break-even calculators to help them make the decision, but my guest today insists that this shouldn’t be your only deciding factor.
Social Security expert, Devin Carroll from SocialSecurityIntelligence.com joins me today to discuss all things Social Security. We’ll touch on the break-even math, including where it works and where it doesn’t, cost of living adjustments, the possibility of the Social Security system going bankrupt, and how Congress could fix the Social Security funding problem.
Since Social Security is such an important part of retirement planning you won’t want to miss this episode.Many people turn to Social Security break-even calculators to help them make the decision, but Devin Carroll insists that this shouldn’t be your only deciding factor. Click To Tweet
Outline of This Episode
- [1:22] The break-even calculator has been used for years to help people decide when they should file
- [5:36] An example of how the break-even calculator could work
- [8:02] Why very few people wait until 70 to file
- [8:50] What’s next for the cost of living adjustment
- [12:42] Will Social Security go bankrupt?
- [16:08] How could the government fix Social Security problems?
How to calculate when to take Social Security
Break-even calculators have been used for years to help people decide when they should file for Social Security. The way they work is that they break down your life expectancy and your benefit to a point in your life when the total of the lower benefit amounts equals the total benefits that you would have received if you had waited to take your benefits at the full retirement age or later.
While the break-even point is an important factor in determining when to file for Social Security, there are other considerations especially if you are married or will have survivor benefits. Listen in to hear why it is so important to factor in other considerations if you are married or have dependent adult children. Learn how to use the data point of the break-even calculator to make better decisions in retirement.Listen in to hear why it is so important to factor in other considerations if you are married. Click To Tweet
Cost of living adjustment
One reason that many people decide to file as early as possible is due to the erroneous idea that COLA (cost of living adjustment) won’t apply to them until they file for benefits. The Social Security Administration factors in COLA whether you collect your benefit or not. Listen in as Devin and I discuss how COLA plays a part in your Social Security benefits.While there could be a decrease in funding, it is very unlikely that Social Security will completely run out of money. Click To Tweet
Will Social Security go bankrupt?
People are always looking for reasons to file early. Many take their retirement benefit as soon as they can, at age 62. Others wait until they stop working so that they don’t receive a cut on their benefit.
Many people who listen to the news worry that Social Security won’t be around forever. At this point, the Social Security trust fund is set to run out in 2034. However, people forget that most of the Social Security benefit is paid out through payroll taxes. So while there could be a decrease in funding, it is very unlikely that Social Security will completely run out of money.
Congress needs to act quickly while there are still ways to help fund the Social Security gap. Future retirees need a way to plan for the future. Learn a few ways that Congress could solve Social Security funding problems and what that might mean for your future benefit.
Resources & People Mentioned
Connect with Devin Carroll
Connect with Benjamin Brandt
- Get the Retire-Ready Toolkit: https://retirementstartstodayradio.com/
- Follow Ben on Twitter: https://twitter.com/retiremeasap
- Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter
Subscribe to Retirement Starts Today on