59 minutes | Sep 29th 2020

Social Security: How it works and optimal claiming strategies

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#50: Social Security is crucial to American retirement. 1 in 5 Americans and 1 in 4 families depend on it. That’s 65M people who will collect $1 trillion in Social Security benefits in 2020.

I said, $1 trillion.

With this massive of an entitlement program, it serves you well to understand how it works in gory detail so you can maximize your benefits. Sound good?

(If you’re a youngster, don’t glaze your eyes over…you may think Social Security is not relevant to you anytime soon, but what you do now impacts how much you collect in the future. So listen up – your retired self will thank you….)

This week, I invited Jim Blair to come share the goods on how Social Security works. Jim is a Social Security expert who spent 35 years at the Social Security Administration advising on benefits and claims, so he knows a thing or two about it.

We discuss:

  • How Social Security benefits are calculated
  • Key factors to consider when deciding what age to claim
  • Optimal claiming strategies and tradeoffs of claiming younger vs. older
  • How spousal, divorced, and survivor benefits work (and how they impact your claiming strategy)
  • When Social Security is subject to taxes (and how much)
  • What is likely to happen to Social Security when its assets go to zero (in <20 years)
  • Whether young people should count on Social Security being there in the future as they plan their retirement finances

Check it out here:


Do you factor in future expected Social Security benefits into your retirement planning? Or do you just assume it won’t exist by the time you retire? Do you think it’s better to claim younger or older? Why? Let me know by leaving a comment when you’re done.

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Links mentioned in this episode:

 Intro/Outro: Old Bossa by Twin Musicom.

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Mark Played