10 Facts You May Not Know About Social Security

When it comes to retirement, Social Security is often misunderstood or underestimated. But the truth is that Social Security can play a vital role in your financial strategy, no matter your income level or net worth.

Here are some lesser-known facts that may shed new light on how Social Security can fit into your long-term strategy:

1. Social Security is more than just retirement benefits

Most people think of Social Security solely as a retirement program. However, it also provides crucial life insurance and disability insurance coverage. For example, if you’re a young worker with a family, your Social Security life insurance protection could be worth nearly $948,000.?About 90% of workers aged 21–64 have some disability coverage through Social Security.1?

2. Delaying your claim can increase benefits

Waiting to take Social Security past your full retirement age can boost your benefits by 8% annually until age 70. While delaying may seem like a simple choice, it's a nuanced decision that depends on factors like your health, work plans, and marital status.2?

3. Social Security adjusts for inflation

Unlike some private pensions, Social Security can be adjusted annually. This cost-of-living adjustment (COLA) is designed to help maintain your purchasing power. In 2025, the COLA is 2.5%, following one of the largest increases in recent history. However, there have been years with no COLA increase, so preparation is essential.3

4. Your benefits may be taxable

Did you know your Social Security benefits could be subject to federal income tax if your combined income exceeds certain thresholds? Up to 85% of your benefits could be taxed, and it’s important to consider how this might impact your overall retirement income strategy.4,5?

5. Spousal benefits can boost household income

Even if your spouse has never worked, they may be eligible for up to 50% of your benefit. Survivor benefits can also be a significant consideration for your household income in retirement.6

6. Social Security provides stability amid market volatility

Social Security delivers financial stability because it is a reliable income stream not dependent on market performance. This monthly payment can help cover basic living expenses without tapping into investment accounts during market downturns.

7. Your total benefit might surprise you

The lifetime value of your Social Security benefits can be substantial. For example, a single high-earner turning 65 in 2025 could receive benefits worth over $630,000 over their lifetime.

8. High income can mean higher Medicare premiums

If your income exceeds certain thresholds, you may pay higher premiums for Medicare. This is known as the IRMAA surcharge. It is one of the most insidious government programs out there. Understanding these costs can help you better prepare your retirement budget.8

9. Social Security benefits are available internationally

If you’re considering retiring abroad, you can still receive Social Security benefits in most countries.?However, Medicare may not cover all healthcare outside the United States so, additional preparation might be required.

10. The Windfall Elimination Provision may reduce benefits

If you’ve worked in a job not covered by Social Security and receive a pension, the Windfall Elimination Provision could reduce your benefits. Understanding this rule is essential for accurate retirement preparation.10?

Conclusion:

Social Security is more than just a safety net; it’s a strategic asset in your retirement portfolio. As financial professionals, we're here to help you understand how to manage your benefits and integrate them into a comprehensive retirement strategy.

If you would like to see how Social Security fits into your retirement or how we help clients reach their retirement income goals using 35% less capital that is required with "traditional" retirement income plan, book a no-cost strategy session with me so we can figure it out together: Book Strategy Session

To your success,

Steve

?