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Debunking The Mysteries Of Social Security

By Wes Holloway

If you are like most people I talk to about Social Security, you might consider the program to be some sort of a mystery. You might be wondering if everyone is as confused as you are about the countless details of how it works. There is a bit of mystery surrounding Social Security. We pay into this “investment” for our entire working lives without knowing what we are going to get out of it or when we’re going to tap into it. But with the right information, you can break through that cloud of confusion and be equipped with the knowledge you need to make the best Social Security decisions for your life. If you have Social Security questions and don’t know where to find the answers, keep reading. 

A Social Security History Primer

Before diving into our question-and-answer segment, let’s do a quick rewind to look at the “why” behind Social Security. The program was born out of the need for a safety net during the Great Depression, when the Roosevelt administration passed the Social Security Act in August 1935. The official name of this program is the Old Age, Survivors, and Disability Insurance (OASDI) Program. Most people think of this program as an investment, not insurance. However, Social Security really is insurance—insurance against your income needs as you age. 

But here’s the problem: Life is very different now than it was in 1935. At the height of the Great Depression, life expectancy was about 63 years. (1) In 1940, the Social Security program had 222,000 participants and the average monthly benefit was $22.60. (2) Fast-forward to 2020 where we have 65 million participants in the program with an average monthly check of $1,514! (3) The program has grown to keep pace, but sometimes with growth, things get a bit more complicated. 

Now For The Questions

Some of the most common questions people have about Social Security are: 

  • When can I claim my Social Security benefits?
  • When is the right time to claim benefits?
  • Does Social Security increase each year I delay taking my benefit?
  • How does Social Security affect my spouse, and does this affect when I should claim Social Security?
  • Can I change my mind after I’ve claimed Social Security benefits?
  • What is the best way to contact the Social Security Administration?

These are excellent questions that must be addressed and researched so you can make your choices wisely. This decision can be emotional in many ways, so arm yourself with the facts before you submit your claim. 

When Should I Take My Benefits?

This is the million-dollar question. Ask any financial advisor and their answer will be, “It depends.” That may sound like a cop-out, but in reality, it’s the right response. There are so many variables at play that impact when you should take your benefits, so there really is no one-size-fits-all strategy. For example, you’ll need to consider: 

  • Life expectancy
  • Need for immediate income
  • Ability to continue working with your current job or a new career

Most of us don’t know our life expectancy. If we did, our Social Security decision would be easy to make! But most of us can examine our family history and personal medical outlook as we make our Social Security decision. You should know that the life expectancy estimate from the Organization of Economic Co-operation and Development (OECD) for a 65-year-old in the United States is approximately 83 for men and 85.7 for women. (4_

Initially, most people took Social Security when they became eligible. Now many wait until full retirement age (FRA). Data shows that age 66 is the most popular age to take Social Security, with 36% of eligible men and 31% of eligible women choosing to claim at this age. (5) But choosing when to start receiving benefits is not a popularity contest. 

To fully answer the question of when you should take your benefits, you would have to know your life span. Since that’s not possible, a financial professional can help you navigate this tough question to make an informed decision. Your Social Security statement will feature 3 notable ages to consider and the corresponding Social Security payout per month:

  • Age 62
  • Full retirement age (between age 66 and 67 depending on your birth year)
  • Age 70

The Benefit Of Waiting To Take Social Security

Does Social Security increase each year you delay taking your benefit? This is a great mystery to many people, and a lack of understanding on this topic leads many people to take Social Security as soon as they are eligible. Social Security increases a substantial amount each year you delay beginning your benefits. Most people know the benefits increase, but they don’t know how much benefits increase. For an individual taking Social Security at age 62 instead of FRA, your Social Security benefit is 70% to 75% of the FRA benefit depending on your birth year. (6)

This can be a significant amount of money and make a difference in a retiree’s quality of life (especially if you are still working). The increase gets even bigger for retirees that wait until age 70 to take their benefit. Depending on your birth year, your benefit at 70 can be as much as 1.75 times your benefit than if you begin Social Security at age 62. Let’s look at a hypothetical situation so you can see the difference waiting might make. 

A Social Security Case Study

James was born in 1954, making his FRA 66. According to James’ Social Security statement, his predicted benefits are as follows:

Full Retirement Age Social Security Per Month % Increase Over Age 62

Age 62$1500N/A
Age 66$200033%
Age 70$264076%

Note how much the increase is from age 62 to age 66 and age 62 to age 70. This amount is tremendous. If you expect to have a long life and you have the income to support you until you turn 70, it might make sense to delay Social Security after you are first eligible at age 62.

Can You Get A “Do-Over” With Social Security?

Why would someone change their mind about their Social Security decision? Maybe they were initially laid off from a job and needed the money, but down the road they get a new job with higher pay. The good news is you can change your Social Security decision. The bad news is that it is not easy to change your Social Security decision. The Social Security website states that you may withdraw your claim only once within your lifetime, and it must be done within 12 months of the original date you applied. Furthermore, you must repay all the benefits you and your family received, including all benefits your spouse or children received, whether they are living with you or not. (7) If you miss that 12-month window, you can suspend your benefits, but only if you have reached FRA but have not turned 70.

How Does Social Security Affect My Spouse? 

If you want to claim your own benefits, you must pay into Social Security for 40 quarters (the equivalent of 10 years). But married people are eligible for benefits based on their spouse’s work history. In most situations, your spouse is eligible for either the benefit from their own work record or one half of the amount of your benefit, whichever is greater. Your spouse must be at least 62 and have already filed for benefits.

Something important to note: If your spouse claims Social Security based on your work record, it does not decrease your own work benefit. This is important to know when planning for retirement and is confusing for some as they try to understand the mystery of Social Security. To further confuse the issue, current Social Security rules do not allow a person to claim spousal benefits until the individual with the greater Social Security work record starts Social Security for themselves. To clarify this great mystery, let’s go back to James, our case study. Let’s say that James is married to Barbara and she is also born in 1954. Barbara can choose to take Social Security based on her own work record or one half of James’ amount (whichever is greater). Here’s what that looks like:

James’ FRA$2,000
Barbara’s FRA$775
One half of James’ FRA$1,000

As you can see, the great mystery is solved! It makes much more sense for Barbara to take spousal Social Security as opposed to claiming her own benefits. But remember:

  • James must start taking Social Security prior to Barbara claiming spousal Social Security.
  • If either James and/or Barbara take Social Security benefits prior to FRA, the benefit for the spouse will decrease based on a formula that takes into account their age and when they initiated Social Security.

What Happens If My Spouse Passes Away?

For most people, when your spouse passes away, you will either keep your Social Security benefits or receive your deceased spouse’s Social Security, whichever is higher. Please note that you do NOT keep both your Social Security and your spouse’s Social Security.

How Do I Contact The Social Security Administration?

You generally have 3 ways to contact the Social Security Administration:  

  • Appointment at the local Social Security office
  • Phone
  • Website (

While many people are more comfortable meeting in person, some of our clients have expressed that appointments at the Social Security office can have a long wait time and there may be limitations due to COVID-19. We have also heard that phone calls often involve a lengthy hold time. If you’re confident with technology, the website has plenty of information, including calculators, that may help you find the details you need. When registering for an account and accessing your statements, you will be prompted for your personal identification information. 

Work With An Experienced Professional

When and how to claim your Social Security benefits is a very important decision. Since the process can be complicated and has such a significant impact on your retirement, it is a good idea to consult with a financial professional first. According to a Nationwide survey, those who worked with a professional reported receiving over 20% more in benefits than those who did not. That’s money you don’t want to leave on the table. (8)

Strategizing with a financial advisor will give you confidence knowing that your benefit will be maximized and you have an expert guiding you through the process. If Social Security is on the horizon for you or you are in the midst of the decision-making process, Heritage Retirement Advisors would love to help. Give us a call at 817.503.0100 or email me at to schedule a free introductory meeting.

About Wes

Wes Holloway is a senior financial advisor for Heritage Retirement Advisors. Wes is passionate about helping people plan for, transition to, and live in retirement with success and fulfillment. Wes graduated from Texas A&M with a degree in industrial engineering and earned his MBA from the University of Texas at Arlington. Before joining Heritage, Wes worked in the travel and transportation industry both for a major airline and an Travel and Transportation Technology provider. To learn more about Wes, connect with him on LinkedIn.