John, so good to see you. This video by popular demand, we're talking Social Security and whether or not you should claim at 62. Claiming Social Security at 62 may sound appealing, but it, of course, comes with trade offs, like reduced lifetime benefits and the Social Security earnings test if you're still working. So let's break down the pros and the cons because I was surprised to learn almost one third of people actually claim at 62. It's known as panic claiming. Why is that? 

Yeah. So I like to call it the early bird claimers. So, really, there's two emotions that, you know, you you brought panic into it. But in my hundreds, if not thousands of interviews with pros prospects and planning with clients, the people who are claiming at 62 or wanna claim, it all comes down to fear and greed. Yeah. Now I am not knocking the people that claimed at 62. I'm just looking at the psychological approach and and why some of that fear and greed actually may be rational. Here's the reason. I've been doing this for thirteen, going on fourteen years. During my whole career, I have heard that Social Security is going to be in trouble by 2034. So if I've been hearing it, so have, you know, the boomers. So they've been hearing this for almost two decades. And, you know, people say, listen. I'm gonna get while they're getting as good, and I'm going to to take it. Now, you know, for for a lot of people, they don't understand because they didn't get a proper analysis on the trade offs of this. Especially if you have a lot of assets, now you're not taken, you know, from those assets. And this goes into the third psychological, you know, approach which is even more rational to to consider its familiarity. Mhmm. So for a lot of these people, they are taking Social Security because perhaps their pension is not as big as their their paycheck or they don't have a pension at all, and they want some assemblance of what they've had for their whole working life. They want that paycheck so they claim Social Security because it's a familiar feeling. And, again, pulling back, you know, if you want the analytics of of whether you should claim early or not, we have a lot of videos on this. This is digging deep into the root, the behavioral finance, and the decision making. So, again, going back to the fair and greed, you know, a lot of people I I would use this analogy that the people who are claiming 62 are saying, listen. I rather buy that smaller house today versus wait for a larger house tomorrow because that larger house, it just seems the way our government's being run, that that larger house is you know, that dream is just dwindling in front of them. So, again, they're not taking into analytics. They're not getting professional advice, and they're making, you know, kind of that emotional decision, which we've seen can have a negative effect, you know, in Social Security claiming, in tax planning, in the markets. Mhmm. 

Right. We have to look at it through the numbers, which is exactly what you're saying, John. So let's spell it out for people who are making those emotional decisions. Layout for everyone just exactly how much you're giving up if you claim at 62 versus full retirement age versus even 70. 

Yeah. So everybody likes to to pit early versus late. The big thing you have to really look at is full retirement. So for most people, they're claiming at 67 right now. So looking at this chart, full retirement age, you know, for this example is $1,000 a month. If you claim early, that's $700 a month, you know, that's that's nearly, you know, 30%. Right? I I I think the number is actually a little bit less than 30%, but that's a lifetime income stream that will be reduced. We've made this comment before. Income stream is the most expensive asset you can have in retirement, so we wanna maximize it. Now on the flip side, if you delay till age 70, it's 1,240. So, of course, a lot of people go, well, would you rather have twelve forty or 700? I don't think that's really the right comparison to make. I think it's really a thousand versus 700 or $12.40 versus a thousand. And, again, then that's where you bring into your personal situation as to which makes more sense to you. I will say this. In all my years of doing this, I've had one client, one, that the analytics, supported, her claiming at age 63 Mhmm. For over retirement age. Of course, there's some spousal stuff, you know, baked in that, but that's the only time, and that was because, the spouse, was considerably older than her. So Mhmm. I'm not gonna say don't ever do it. What I'm saying is get the expertise, that help to make help you make the educated decision. 

Absolutely. It needs to be a conversation, not just a calculation that you see online all the time. So let's circle back to that Social Security earnings test and how this affects people who continue working after claiming early. 

Yeah. So this I've seen a couple people make this mistake. They they were prospects. They weren't clients yet. They had come into my office. They retired, and they start claiming Social Security. Then a couple months into getting that Social Security check, they get a job. They get an offer to do some consulting or their their company wants them back just on a on a part time basis. And they're like, you know what? I've got so much time on my hands I'm gonna take this. Well, they didn't take into consideration the earned income limit or earned income test, and that is before full retirement age. So 66 and below for you that are claiming at seven is full retirement age. For every $2 over the limit, which is $23,400 of income a year. So for every $2 that you go over that amount, $1 of your Social Security benefit is forfeited. Wow. So consider this. You've already taken a up to 28% reduction in your Social Security benefits. Now you're getting $1 withheld because, you know, you're making beyond $23,400. And, you know, I will tell you this. This this dollar being withheld is not permanent.  Right. 

What happens is, you know, later down the road, they will amortize it back in and spread it out over a very long period of time. But this is the this is the hard no. Listen. If you're going to work, don't claim Social Security until full retirement age. At at At full retirement age or even in the full retirement year, so let's say, you you're turning 67 in August 2026, you can earn up to $62,000 prior to that and be under the in earned income credit. But, you know, in generally speaking, having that earned income credit and having to give back half your Social Security plus, you know, the reduction, it's just not worth it. If you're one of those people that is like, oh, blank right now, I just did that. If you're within the twelve months, I highly recommend considering contacting Social Security and saying, hey. Listen. I would like my one time mulligan. I wanna do over. Here's you you you would have to give back all your Social Security money. But, you know, if you know you're gonna earn this money for a couple years, it it will be well worth it. Mhmm. You're only allowed to do this. Once once twelve months passes, it's irrevocable. So if you're within that twelve month period and you've done this, get some help. 

Yeah. So then, John, what should we consider before making the decision to claim it? 62 versus waiting. 

So, again, this goes back. We've got a lot of videos on this, but it really comes down to health and do you really need the money? Mhmm. So health is really the big one. Again, you do have those offshoots of of spousal claiming where, you know, in that one case I told you, that made sense. But, you know, if you're not if your if your time horizon is small, then by all means, get while, you know, the get is good for for your health. The other the other suggestion of, hey. I need this income now, that really goes into why and are you still working? Because if you're if you're really struggling and you need to turn on Social Security and you're still able to work, then you really have to have that conversation. And as a fiduciary adviser, it's an expert in Social Security claimant, I'm gonna have that tough conversation with you because it's in your best interest. I'm gonna push back on you and say, listen. You really have three options. If your assets aren't covering your expenses or your income's not covering your expenses, you either stop spending as much, which, yeah, I don't even want for my clients. I really don't think anyone wants to live lesser in retirement or continue your career for another year or two, which can have a substantial positive impact or find part time employment that will cover that gap so you don't have to claim Social Security. Mhmm. But, really, I mean, that that's the the only reasons why you would claim at 62 in in what I've seen.  Mhmm. 

You know, on the flip side, delaying till $8.70, I I call those those maximizers. These are really the people that have in my experience that I've seen have done very well in their investments and savings. They have the assets. They sought out the help, and they understand that Social Security dollar, at its worst, 85% of those dollars are taxed, whereas $1 or 100 percent of $1 of an IRA is tax. So they understand a little bit of tax efficiency. They understand the spend down and perhaps reducing RMDs in the future. They understand that an income stream in retirement is the most expensive asset you can have, so they're maximizing that. And then they also understand the widow benefit of if they die, one of those Social Security benefits is gonna go away, and they're gonna maximize it. So they are they are willing to delay that dopamine hit. They're willing to delay that instant gratification for the bigger plan that fits their individual needs. And and, of course, they're also healthy. 

Mhmm. Well, I mean, John, it comes back to what we've again said many times before. Only four percent of people are claiming at the most financially optimal time. And I know that working with people to help them determine when that time is is something you specialize in. So, again, we have a great library of resources on your YouTube page. But if somebody would like to talk this through with you, how can they get a hold of you? 

Well and and you you brought up that 4%. So before I get to that, I just wanna say this on the psychological approach. I think 4% might be a little bit low because maybe not all my clients have maximized their Social Security in terms of numbers, but they've maximized it based on their lifestyle. And and by that, they either claimed at full retirement age, they may have delayed till age 70, or they claimed at 68, 69. And their thought processes was, listen. I I'll take a nominally smaller paycheck because I'm healthy and I wanna live life now and I want this extra money. That's fine too. I I really just encourage people to really try to get to that full retirement age if possible. But in closing, again, going back to the psychological belief, I want you as the viewer, if looking at claiming Social Security, ask yourself this. Which is going to cause you more regret? Living to age 95 with thirty plus years of smaller paychecks or maximizing your income stream, having those larger paychecks, and perhaps dying, whether it's suddenly or, you know, with with a health condition before you break even. That's that's a big question to ask yourself. I think that that will help you have some clarity along with some numbers that you should seek. But remember this, Social Security claiming is something you can control. There's not a whole lot of things we can control. We can control some tax liability, but Social Security, you can control. So don't squander this opportunity by just making an emotional decision or listening to your neighbors, your brothers, your sisters, your friends who who don't really know your values and and your actual situation. Get professional help to help you make that decision. It's not my it's not my job to make the decisions for my clients. It's my job to give them the approach and the information to make the best choice that they feel most comfortable with that will give them the least amount of regret or no regret at all. 

Mhmm. With that Yeah.  If you want to look at all of our other past videos, visit our website, www.gosecures.com. We have a lot of videos, and you said it first. You said it earlier. Social Security is one of the most sought after advices. It's it's our by far our largest viewed videos, but they're all on our website, www.gosecurus.com. While you're on our website, you can visit the contact us tab. And if you have any, general questions, you can go ahead and schedule a twenty minute phone call. Or if you wanna pursue more planning, you can schedule a one hour complimentary, vision and clarity consultation. 

John, thank you so much for your time today.  Thank you, Erin