What are your benefits?
Social Security is one of the best-known government programs and a cornerstone of retirement for millions of Americans. Since Social Security’s creation in 1935, it has been a financial backstop for people, helping protect retirees, families, and survivors when life takes a turn.
The Social Security Administration designated April as “National Social Security Month” in 2017 to help people better understand the program. It’s a timely reminder because Social Security is a nearly 100-year-old institution, and the decisions around it are not always straightforward.
Frankly, Social Security is both important and complicated.
That’s why we include Social Security in our planning conversations at EBW. You don’t need to become an expert, but knowing the basics and understanding your options can help you make smarter, more confident decisions for you and your family.
Here are four actions that can help you feel more informed and more in control.
1. Know Where To Look:
One of the most important tasks in managing your piece of the Social Security pie is to know where your information lives. Many people don’t realize that even if you are nowhere near retirement, you still receive an annual Social Security statement. The situation you must consider is that statements are not sent directly to you until you reach a certain age. However, it is important to understand your eventual benefit before you start planning your retirement.
So, the best move is simple: set up your online Social Security account.
You can create your account through the Social Security Administration’s “my Social Security” portal (click here or search: “SSA my Social Security account”).
Inside your individual Social Security account, you can see:
- Earnings history
- Estimated future benefit
- Planning calculators that help you run scenarios
They are not perfect tools, but they are useful starting points for understanding what your benefits may look like.
2) Know What It’s Worth: (it’s usually more than people think)
People approaching retirement often underestimate how valuable their Social Security benefit can be. If we assign conservative assumptions to factors like inflation, life expectancy, or investment return, it is entirely realistic for the average 60-year-old’s Social Security benefits to be worth nearly $400,000 as a "lump-sum."
Now compare that to other major assets you treat carefully:
- 401(k) / TSP
- IRA
- Home equity
Most people would never knowingly make a decision that permanently reduces one of those by 20% or 30%. But timing decisions around Social Security can create that kind of impact. Which is why understanding the tradeoffs is so important.
The average benefit is a little more than $2,000 per month. That number may not sound dramatic at first glance, but here’s the better question:
What is a monthly paycheck worth over a 20–30-year retirement?
3. Know that benefits will change (but that does not mean it “goes away”)
You have probably seen headlines about the Social Security trust funds and the idea that reserves could be depleted in the mid-2030s.
So what does that actually mean?
It does not mean Social Security disappears.
Under current projections, if nothing changes, the system will still collect payroll taxes and still be able to pay benefits, just not at the full scheduled amount. Many projections describe a scenario where future benefits could be paid at roughly 70%–80% of what is scheduled.
That leads to the question everyone asks:
“So what will happen to my benefits?”
The honest answer is: we do not know yet.
But we do know what happened the last time the program faced major funding pressure (notably in the early 1980s). Potential “fixes” have historically included things like:
- adjusting the full retirement age
- changing payroll tax rules or rates
- changing benefit formulas
The key takeaway: historically, lawmakers have tended to avoid sudden cuts for people already receiving benefits, or those very close to claiming.
So, while decision-makers do know something must change, we don’t expect any significant changes or disruptions for people within roughly 10 years of Social Security retirement age. For individuals younger than that, a conservative planning approach can make sense: do not assume every dollar of today’s projected benefit will remain unchanged forever.
4) Know Your Strategy (because claiming is one lever you can control)
A lot of Social Security is out of your hands, but one decision can dramatically shape the outcome:
When you claim:
You can start early and receive a smaller monthly check, or delay and receive more. You may also have planning considerations tied to:
- spousal benefits
- survivor benefits
- dependent benefits
This is why Social Security is not just a “retirement checkbox.” It is a planning decision, and it should be evaluated in the context of your full financial picture: cash flow, taxes, health, longevity, portfolio withdrawals, and family needs.
Also important: once benefits begin, your decision becomes difficult to undo after a short window. So it is worth slowing down and reviewing it carefully before you start.
If you’re unsure, now is a good time to ask
National Social Security Month is a great reminder to check your record, understand your options, and make sure your claiming strategy fits your broader plan.
If you have questions about what you might receive, when you should claim, or how Social Security fits into your retirement strategy, an EBW advisor is ready to help you work through it.