Are you sacrificing your future by taking social security too soon?

Ralph
00:00:00

Are you wondering if taking Social Security too soon could be sacrificing your future? Well, today we're gonna be tackling a critical question that could impact your retirement finances, and your faith. So stay tuned to find out how claiming Social Security early can affect your financial security and how to make the best decision for your future.

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Podcast Announcer
00:00:24

In a world where crushing debt keeps you trapped, where living paycheck to paycheck has become your new normal, and where the dream of retirement seems impossibly out of reach, there's hope. Join financial evangelist Ralph Estep Jr. A man who's walked through the fire of financial failure and emerged stronger on the other side.

Welcome to Ask Ralph, the show where real world experience meets biblical truth to break the bondage of financial despair.

Get ready to take control of your money, break free from the financial stress and align your resources with God's purpose for your life. This is Ask Ralph with Ralph Estep Jr.

Ralph
00:01:04

Well, thank you for joining me today on the Ask Ralph Show. I am your financial evangelist, Ralph, and I'm thrilled you're spending your valuable time with me. If you're a new listener, welcome to the show and if you're a repeat listener, I wanna just thank you for your time.

Now, today's topic could make a significant impact on your financial future, and I am super excited to share today's episode with you because this is something in my practice that I probably get asked about several times a week. Now, yesterday we discussed an important topic, and that is, are you ready for the IRS when you sell online or if you have a side business or a side gig?

So if you missed it, make sure you check it out. You can check out all of our episodes at askralph.com because yesterday we covered some key takeaways on preparing for the IRS and making sure you don't find yourself in a tax bind at the end of the tax year.

Well, today we've got a pressing and thoughtful question from one of our listeners named John, and this is what John writes.

Ralph, I'm approaching retirement age and I'm deeply concerned about the decision to take Social Security early. My wife and I have been saving and planning for years. But the thought of potentially sacrificing our future financial security by claiming our benefits too soon is keeping me up at night.

We've worked so hard to build a comfortable life, and I don't wanna make a decision that could jeopardize all of that. Can you please help me understand the implications and guide me on how to make the best decision for our future? Well, John, let me just tell you this. You are already in the decision point, and that is great.

And I thank you so much for your question. It is a question, like I said, I get this routinely in my practice, and John, as I read your question, as I listened to what you were saying, I can feel the weight of that decision on your shoulders. You worked so hard your entire life. You and your wife have made these plans for what your retirement is gonna look like.

And many people, John, you're not alone in this. Many people struggle with trying to decide what the timing will be for when they start taking Social Security. And listen, John, it's completely natural to feel uncertain. It's natural to feel anxious about it. In just preparing for the show this morning, I went out to look on YouTube and there are thousands of videos of all kinds of people all over the place talking about whether you should start at 62, whether you should start at your full retirement age, or if you should wait till 70 and listen, it is a maze. But today my goal is to unwind it and try to make it pretty simple for you because I understand this, John, you've worked hard.

You and your wife have saved diligently, and now you're at this crossroads. You're trying to decide what do I do? And this decision could, and it's true, John, what you said. You don't wanna make a bad decision. This decision could possibly impact your retirement years. This decision could impact the rest of your days.

But the big takeaway I have from what you're asking me, John, and anyone else listening to this. It's about you want to get to that point of having peace of mind that comes with knowing you've made the right choice. And like I said, I've seen people struggle with this firsthand. I've had countless clients who have come to me and said, Ralph, please give me an answer.

And they're sometimes a little frustrated because there isn't a one-size-fits-all answer for everybody. But this struggle, this feeling of uncertainty is not something you have to face alone. Like I said, I get this question several times a week and it's a tough decision, and here's a little key takeaway as we start here.

First thing I'm going to lay some ground rules. This decision is not just about numbers, it just isn't. It's about the quality of your life, the quality of your wife's life, and what kind of life the two of you are going to have in retirement. It. And John, I've been in your shoes. Well, not quite at retirement age, but like I said, I've worked with hundreds of clients who have faced this same dilemma, and I've seen the relief and the security comes from making an informed decision.

So that's what we're gonna really focus in on today. We're going to work on how can you make an informed decision? And let me assure you, John, there is hope. There is a way to work this out. We're gonna work together. We're gonna look at the financial implications, we're gonna talk about your health, we're gonna talk about your retirement goals, and we're gonna make sure you have all the information for the best decision to be made for you and your wife.

It's what I call that informed decision. So John and everyone else listening, you are in the right place and I'm here to help you navigate this challenging time.

Now, if you've got a question you'd like me to answer, just like John's go to justaskralph.com because listen, people say I'm crazy, but I love answering questions. It's the central part of the show. My goal is to provide you with the guidance you need to make informed financial decisions and all of that blended with our true belief in our Christian faith, because those two things go hand in hand, which leads me to our Bible verse

So John, as we get into this topic, let's start with a Bible verse that provides wisdom and guidance, because that's what we need to make in this decision. One of the things I pray about every day is, Lord, give me wisdom, give me guidance. Show me what You want me to see. So let's get right to it. In the book of Proverbs, chapter 16, verse 3, it says this, "Commit to the Lord whatever you do, and He will establish your plans."

What a beautiful point in scripture. Commit to the Lord. Whatever you do, not, some of the things you do, not a couple of the things you do, the scripture speaks very clearly when it says, commit to the Lord whatever you do, and here's the reassurance in that, and he will establish your plans. Think about that establishment, that feeling of security.

And this verse clearly reminds us that we need to seek God's direction in all of our decisions, including the financial ones, and that's something you don't hear on a lot of secular podcasts or secular shows that you might be watching. The two worlds go hand in hand. We need to include the Lord in our financial decisions, and here's what He tells us.
By committing our plans to the Lord, we can trust that He will guide us and He will help us make wise decisions that align with His will, because that's what we're really seeking in the end. If you know I talk about this on the show all the time, we have an obligation to steward our resources. Well, this is the very definition of that.

We need to understand what God's will is for our life. So let's start by asking a prayer about that.

Well, now I want to tell you what I'm grateful for today. If you're new to the show, one of the things I do after I get through the Bible verse every day and we talk about scripture and how that impacts our lives, I want to tell you about something I'm grateful for because one of the things I've learned in my 52 years of life as I sit here and record this right now is we need to find things to be grateful for every single day.

So today, I am truly grateful for the opportunity to help people like you, John, and others who are navigating their financial challenges. From a place of faith, I could have a simple business show. I could talk about all the business things, all the great business things you can do. I say this on the show all the time.

I can make you a very wealthy scoundrel. But my heart is taking me in another direction, and the Lord has so richly blessed me. He's given me experience. He's given me understanding that I can use to help assist others in making wise financial decisions. So I am thankful for all of you who are listening.

All of you that trust me with your questions and allow me to be part, even if it's just a small part of that daily journey, that journey we're all taking towards achieving financial freedom and spiritual growth. So I truly appreciate the time you're giving me and the things you've done and the questions you've shared with me.

So John, I always like to tell you about somebody that I've worked with or someone that I've counseled in this. So let me share a personal story that really illustrates the importance of timing your Social Security benefits. So a few years ago I worked with a lady named Mary.

Now, as I've said on the show, again, Mary's not her real name. If you send me a question and you don't want me to use your name, I won't. I never divulge any information with clients. I always use different names. I change the stories around somewhat if I need to. But just picture this, Mary's nearing retirement and she is eager to start receiving her Social Security benefits.

She was excited about what retirement would look like. Would she be traveling? Would she be going to visit her grandchildren? What does her retirement life look like? Does she volunteer? Does she do more things at the church? And she's so eager about starting that. She said, Ralph, I remember her talking to me.

She said, Ralph, I'm so excited I'm gonna be able to do this, this, and this. I'm not gonna have that, that grind of  9-5 job every day. But here's the thing you need to understand about Mary. Now, Mary had some health concerns. As I recall, I think she had diabetes, had joined a club.

I'm right there with her and high blood pressure, again, check the box for me as well. So I can certainly relate to that. So Mary was also though at the same time, she had these health concerns. She was worried about her financial security because here's the thing with Mary. Mary shared this with me and it was emotional for her.

She said, Ralph, I've seen how my own mother and father struggled in retirement. There were many times I had to help them out because they just didn't have the money. And she said to me very clearly, she says, Ralph, whatever I do, even if I have to work till I'm 80 years old, I don't want to end up in that same position that my mother and father in.

I watched them struggle. I watched him rob Peter to pay Paul whatever kind of colloquial terms you want to use. She saw it firsthand. She saw the ache and she saw problems, the anxiety that her mom and dad had. They were always worrying about burdening her and her siblings. Now again, I get back to Mary was excited about retirement, so she was tempted to claim her benefits as soon as she turned age 62.

And we're gonna talk about what that looks like, what your choices are in just a few moments. But she at that point said, you know, I think I'm gonna reach out and talk to somebody. And she had seen somebody at church or something and mentioned, Hey, I know this guy Ralph. You should go talk to Ralph.

So she made a decision to come and reach out to me. She scheduled a consultation with me and we talked it over. We just had a very frank discussion and it was a detailed discussion though. But we talked through all the nuances of what she was going through, all of those anxiety. She had that fear, that very real belief that she didn't wanna get to the point like her folks did, where they struggled.

She said, Ralph, I don't want to get there. And we finally came to a realization, even with her health issues, that claiming her benefits early was not gonna be the best choice for her because it would reduce her monthly benefit amount. So in making this decision, I'm gonna talk about that on today's show, how we got to that point.

Well, for Mary and for everyone else I work with, if you need help with this, I can help you with this. I'll talk to you a little bit later in the show about how to get in touch with me. But the first thing we did, we explored her financial needs. We looked at what her finances look like, how much was she bringing in?

Again, what did we do? We started looking at that intentional spending plan. We looked at her assets, we looked at her liabilities. We really painted a picture of where we are. Again, no judgment, just facts. The next thing we talked about was we had a candid and frank discussion about her health. She mentioned her diabetes. She mentioned her high blood pressure.

But the good news for Mary was she was able to manage those things. And even though she had those just like me, there's things we can do to make that better. And the final thing we talked about was her family longevity, because this is a key thing. And see Mary's family, there's a lot of longevity there.

One of the reasons that her mom and dad struggled is they lived until their late eighties. And she, and again, she did have some health concerns, but like I said, her health concerns, the diabetes type two diabetes, the high blood pressure, they were manageable. She could take medication, she could increase her exercise, she could do all the things to live a more fulfilling life and really manage that.

But she also knew, she said to me, Ralph, she says, mom and dad lived into their late eighties. If I retired at 62, I don't know that I'm gonna have enough money. So in Mary's case, we made a conscious and informed decision, and she decided, I helped her, she decided delay her benefits until what we call full retirement age.

You'll hear me call it FRA, we'll discuss that in a little bit. But that decision, that decision would give her 100% of her anticipated benefits at that full retirement age. Now see, here's the thing you need to understand. That decision not only maximized her monthly benefit, but it gave her the big takeaway, I call it the big bear hug.

It gave her that financial peace of mind, and that was what she was really asking for. She came in, I think in her own mind, she thought, well, Ralph's gonna help me make this financial decision. We're gonna talk about numbers and we're gonna do, you know, weighted analysis and we're gonna do break even analysis, and we're gonna do all these actuarial tables.

But that wasn't at all what she was really striving for. What she was really striving for was that peace of mind. That was what was so important to her. So you might be saying, Ralph, what are the key takeaways from her story? Well, let me share them with you. She realized as I counseled her, that claiming social security benefits early, can have a long term financial consequence.

And here's the deal. Listen to me on this. You've got to look at this with a long-term view. This is not a short-term decision, and the best part of this is you don't have to make the decision overnight. You've got time to make the decision. But that's what it came down to, to Mary. She said, Ralph, I have to look at this in the long-term view.
My health issues. Yeah, I've got some health issues, but they're manageable. My family, you know, they live to be older. I don't want to be like them. So that's where she arrived at that decision and she was at peace with that decision. So John, let me break down the implications and let you understand the options available to you, because this is really what it comes down to.

So here is the real basic starting point. The Social Security Administration, or what we'll call the SSA offers retirement benefits based on your work history. That's basically what it comes down to. And the age you choose to start receiving benefits. So they look at your, you have to have 40 quarters or 10 years of work.

They look at your age and that's how they determine how much you can get based on those two things. How much money you put in, basically your work history and your age. So here are the real points that you can pick from. The first one I'll call is Early Retirement. So this is what Mary was originally considering,

John. She could have started claiming her benefits at age 62. But here's the thing you need to understand and hear me on this. A lot of people think 62, dude, I'm out. I am retired. No worry, no hurry, I'm retired. But you need to understand it. This decision. Will have an impact till the day you pass away.

'Because it will be a permanent reduction in your monthly benefit amounts. You might be saying, Ralph. Okay. What does that look like? Well, here's the general rule. If you take your social security at age 30, you're gonna lose 30% of whatever your full retirement benefits would've been. So when you go onto the SSA website or you get that report that says, Hey, your benefits at your full retirement age are this, by taking it at 62,
you are going to decrease that benefit by 30%, and that's for life. That's like a life sentence. Now, there may be very compelling and reasonable, ways that you would want to take it at 62. That is not, I'm not trying to sit here and say that is a terrible decision, again, it depends on your individual circumstance.

We'll talk about that in a few minutes. So that's your first choice. The first exit ramp, if you're on the super highway to Social Security, the first exit ramp is what we call Early Retirement, and that's where you take that exit at age 62. The second, now listen, just so we understand each other.

Just because you can start at 62, you can take it at 62 and a half. You can take it at 63, 64, 65. There's no cast in stone point where you can't take it, but the earliest age you can take it is age 62. The next big milestone or the next exit on the Social Security Interstate is what I call, or what the Social Security Administration calls Full Retirement Age or FRA.

Now, this is the age at which you're entitled to your full, unreduced benefit amount. Now, this depends on your birth year. You can go out to ssa.gov and I encourage everybody to go set up an account at ssa.gov. Just like I tell you to set up an irs.gov, set up an ssa.gov. You're gonna need to set up an ID.Me, but have this information and be able to go out there and use the resources, look at your earnings, make sure it's right.

It's not for our show today to discuss that. Maybe we'll plan a show about that in the future, but have that information so, you plug in your birth year and it will tell you generally what your full retirement age. Right now. For most people it's around age 67, and like I said, this is when you're going to receive 100% of what they say your benefits would be based on your lifetime earnings and that full retirement age.

This is what Mary decided to do in our situation. She didn't wanna wait till the next off ramp. Which we'll get to talking about in a second. She thought this was the best decision for her, so she waited to 67 and you could do the same thing. So that's off-ramp number two, first one off at 62. Next one off at full retirement age.

And like I said, there are a little mini off-ramps all along the road. You don't have to wait till that last minute. Now the other thing you can do. And this is what I see more and more people doing is what they call Delayed Retirement. And see you can delay those benefits until you reach age 70. Now once you get 70, you don't get any more benefits after that.
So there is absolutely, in my view, no reason to take them later than 70. You know, there might be somebody out there who's saying, but Ralph, what about this? Generally speaking, 70 is the final number. Now, here's the thing you need to understand. The longer you can wait, the longer you can get closer to that 70 age, your benefits increase.

Generally, benefits increase about 8% per year. So if you take it at full retirement age, that's gonna be the a hundred percent number. If you wait till 68, it's gonna go up by 8%. If you wait till age 69, it's generally gonna go by 16%. That's eight plus eight if you wait till 70. Like I said, it's generally about 25% more benefits.

Again, this is for life. This is the life sentence of Social Security that you've struck it. This is what you're gonna do. And like I said, I'm seeing more and more clients that do this. And again, let me be abundantly clear. It depends on your situation, and John, like I've said a couple times already, no one-size-fits-all, but that is the final off ramp.
So you're going to that destination, that destination is Social Security. Man, it's a dead end at 70. There's no more off ramps. But like I said, you can start at 62, you can do 63. You pick a day, it doesn't matter. I have clients that start all over the place. It depends on their life circumstances. Now, John, one of the things you mentioned, and I wanna take a little, I'm gonna take a little detour here.

You mentioned that you're married. So let's park here for a moment and let's sit in the park and talk about some spousal benefits, because when you're married, the game changes a little bit because this may change your plans depending upon your situation. There's a thing called Spousal Benefits.

Let me explain that. If you're married, your spouse may be eligible for spousal benefits based on your work record, even if they didn't work or they have limited or no work history on their own. So for example, let's say that you have what we'll call a, I don't wanna say old fashioned, but a traditional family where you go out to work, you go slay the dragons, and your wife raises the children, is the homemaker.

That's what my wife and I do, to be very candid with you. I don't wanna say it's old school, but that's what we do. So that's the relationship. Well, if your wife is not working outside the house, she hasn't been paying into Social Security. She doesn't have those, what they call 40 quarters or 10 years of earnings, so Social Security understands that and they give your wife, your spouse, the spousal benefits.

This leads to one important strategy for married couples, and I want to spend a few seconds or a few seconds or a few minutes to talk about this. It's what's called restricted application. You don't hear about this talked a lot on those websites and go looking about what's going on with social security, but it's called the restricted application for spousal benefits.

And here's how it works, John, by using this, this option allows your spouse who's eligible for their own retirement benefit. Now, this is a little bit different situation, so maybe let's say your spouse did have 10 years worth of working, so at some point she would be entitled to her own benefits. One of the things she could do is she could, or he, it could be either way, could file what's called a restricted application for spousal benefits only.
So they're only getting your benefits that 50% of what you would be entitled to. And then here's the beauty of this, then your spouse waits till age 70 to maximize their benefits. And you gotta look at the numbers. If that 50% is going to be a windfall, they wait till 70. It allows their benefits to grow, like I said, that 8% per year.

So you're still getting money into the family because they're collecting 50% of your benefits. Now you're collecting yours also. Nothing changes in that regard, but your wife or your spouse is able to get those additional benefits and wait till she or he is 70 and lock into that number. And if you think about it, what you're effectively doing, you're allowing that spouse's benefits to grow until they reach that late age, that delayed age we talked about.
And what does that look like in real numbers? That looks like 25% more than what their hundred percent benefits would've been at the full retirement age. So this can be a very good plan depending upon your circumstances if you find yourself in this situation. Now, another thing you wanna think about is what's called Survivor Benefits.

And a lot of times these are overlooked. People don't know about these. Let me explain this a little bit. So, in the unfortunate event of the death of a spouse, and this is not a great thing, this is not a good situation, but it's there and you need to understand it. Social Security provides benefits to survivors and their family members, these benefits, they're calculated based on the deceased workers' earning records. So they're gonna look at, let's just say, John, in your situation, you pass away, your wife and your, if you had minor children, could actually collect a portion of your Social Security benefits. And this thing becomes a lifeline for those surviving spouses.

It could be for their children or even their dependent parents. And this is a game changer. I've worked with clients. A lot of times, you see this when there's a big difference in age between husband and wife, or maybe the husband died at an early age. It's a tragedy. But here's one of the beautiful things about these survivor benefits.

Your child can then collect social security benefits to help replace some of that income that was lost. And they get it, I think, as I understand it, up till when they finish college. So this is a big game changer, but it's one of those things you need to understand if you've lost a spouse. There's even parental things where if you lost a parent, you might be able to collect it.

So John, now you're probably asking Great, Ralph. I get it, but I still don't know. You haven't told me. How do I make the decision for me? You've talked to me about how you did it with Mary. You talked to me about, you know, beginning age of 62. You talked about the, we talked about that whole interstate when the off frames are.

You talked about that full retirement age, and then you talked about that delayed age. But Ralph, you haven't told me how I can make the best decision for me. Well, guess what, John, that's what I'm gonna do now, because in order to make that decision, we have to consider a few things. So let's talk about those things right now in detail.

I'm gonna kind of break this down into a little, a couple few pieces. And the first area to discuss are those financial considerations because there are some key financial considerations to keep in mind as you decide when to claim your social security benefits.
The first thing is this. And this one is crucial. If you take it early, you're gonna have reduced monthly payments. The most immediate consequence of claiming your social security before full retirement age is that permanent reduction in your monthly benefit amount. It is what it is. It's a locked in.

I mean, you throw away the key when that happens. And like I said, this reduction could be as high as 30%. If you claim your benefits at age 62, when that full retirement age is 67, I'll give you an example. So let's just say your full retirement benefit is $2,000 per month. That's when you hit age 67. But if you claim that benefit at age 62, that could reduce your benefit to only $1,400 a month.

Think about the math. $2000 at full retirement age, 1400 locked in for life at that early 62. That's $600 a month. And what does that mean for you? This means less money to cover your living expenses. This could potentially impact your financial security in the long run because that is what you're going to get.

Now, there could be cost of living adjustments. I'm not even gonna go there, but this is what you're gonna lock into. You're basically saying, okay, at age 62, I get it. I could get $2,000, but I'm gonna take the early offer. I'm gonna take that first exit Ralph talked about. But understand, you're locking into that $1,400 per month or you're leaving $600 on the table.

Now, here's another thing you gotta consider. You're missing out on future growth. If you delay social security, that allows your benefits to grow significantly, like we talked about, if you do it early, you're losing 30%. Well, if you wait till that second off ramp, that full retirement age, those delayed benefit retirement, things can add up and that results in a much larger check in the future.

Now I'm talking about now we're gonna reach out to waiting till you're 70. So think about this for a second. So you decide your full retirement benefits, like we talked about, is $2,000. That's if you wait till the full retirement age. We already talked about if you do it early, it's $1,400. Well, let's say you wait till you're 70.

Now all of a sudden we're gonna add 25% to that monthly benefit. So real simple math, 25% on $2,000. Now I've got an additional 500 bucks a month. And again, that is locked in for life. So that decision was if I take it early, I lose $600 a month. If I take it during the full retirement age, I get what they say.

But if I wait till 70, if I can make this happen, now, I'm gonna add $500 a month to my benefits. That's $6,000 a year. What would you do with that money? What would that peace of mind look like? What could you do with that? Could you support missionaries at your church? Could you go on those vacations?

Could you help out your grandkids with their college education? That's not a small amount of money. $6,000 is a lot of money. So you gotta ask yourself this, John, and this is one of those financial pieces to this. Where else can you find a guaranteed 8% return on your money in today's economic environment?

Not many places you can find it. Now, there are some crazy investments you can take right now. We're sort of in an inflationary stage, but this is a guaranteed locked in 8% return. So you've got to think about that. The third thing you gotta think about, and this was so key in Mary's decision, and that is that risk of outliving your savings.

Because here's the thing, you need to understand. When you start Social Security early, it might seem like a good idea. If you need that immediate income, you might be like, yeah, you know what, Ralph, I'm just tired. I don't wanna work anymore. This nine to five drag, my body is aching and it's tempting.

It's like, you know, I can take this first off ramp, I can lock into that. Just use that simple example, that $1,400. It's tempting. You're like, you know, I could live on that. You know, I could scrimp and save, you know, I've got some money set aside. I can start taking money out of my retirement.

Maybe I've got a pension, maybe I've got some IRAs. Maybe I've got some annuities. I can make this work and trust me, I've seen many people take that off ramp, and it's tempting. John, you might be thinking about this yourself. It really could cause you a long-term risk because now you're depleting your retirement savings too quickly.

Because let's say you're only getting that $1,400 a month, but that's not enough to live on. You've had unforeseen things, you've got some medical expenses, so now you're tapping into your pension more. You're tapping into that emergency account, you're tapping into your savings. Maybe you're taking money out of that annuities, and then all of a sudden you get into that fear that Mary had.

You got that reduced monthly benefit. And you come to the realization that your savings might not last as long as you need them to. You might be getting to that point where you're seeing what Mary saw with her parents, and you don't have enough money to live that fruitful retirement. And I see that it's a tragedy.

I see this all the time in my practice where people made that decision to take those benefits early. And I truly tell them. I really think you need to think this through. They come in to meet with me. They're expecting me to say, yes, that's a good plan. Ultimately, it's their decision, but you really have to think this through because here's the truth.
Healthcare costs are increasing and your long-term care needs are going to be expensive. I've done many shows on this. My mother-in-law's going through this right now, and I see what it's costing her. Well, if you made that decision to take that first exit. You've locked into a lower amount of money coming to you and you're depleting your savings.

So really give some thought, John and everyone else listening to those financial considerations. So once we get past those financial considerations. This is where we gotta start talking about our health. John, you said to me, Ralph, how do I make this decision? First thing I told you is think about the finances.

You know, do you want to have less benefits? What do your costs look like? What does your income look like? But the second piece to this puzzle, and this is what I work through with Mary, I work with all my clients, is your health status and your family longevity are crucial when deciding when to claim your benefits.

So the first thing you need to do, just like I did with Mary, consider your current health status. If you've got any health concerns that might affect your life expectancy. It might be more beneficial to claim your benefits early. I know this is not a nice thing to talk about, but maybe the truth is you are not gonna have a long life.

Maybe you've got some heart disease and it's just not getting better. Maybe you've got some chronic illnesses that you're just not gonna live that much longer. The Lord's gonna say when your day is, but there are some. You can see the writing on the wall, so this may very well be your reality. It's not an easy thing to discuss.

And I've had clients that are in this very situation and I've said to them, listen, yeah, your health is not great. Maybe they're a cancer survivor and they just got that diagnosis that cancer has returned, or maybe they've been battling chronic illnesses and it's just, they're just struggling. And I'm not saying they're giving up, but the reality is they're not going to live to be 83 or 84.

And that's generally the break even. I'm not even gonna go there today. But that's generally the break even of where it makes sense to wait. But that's just a sad reality. Now, on the other hand, maybe you've got great health, like Mary, she had some health, you know what I'll call bumps in the road. But those were all things she could manage and maybe you expect to live a long life and then in that case, delaying those social security benefits could provide that larger monthly check into the future.

Again, it's a very individual decision. Now, you also have to look at family longevity, and this is one of the things that we landed on with Mary. If your family has a history of longevity, it might really be wise to delay claim in your benefits because that's gonna ensure you're gonna get that larger monthly benefit for a longer period of time, which is going to provide you with that financial security for years later to come.

Because, listen, I've had clients live well into their nineties. They saw their parents' situation and they made an informed decision. But now you might be saying, Ralph, look, dude, at 65, I'm the oldest cat in my family.Nobody makes it past 68. Nobody, I can't find a single person. Well, then you gotta say, you know, unfortunately, maybe you pulled the lever and you got a bad record on the gene pool.

I'm sorry Lord has plans for you. I'm not diminishing that, but that's just a reality. That's a health reality. So you've got to be honest with yourself. Look at your own health. What is your lifestyle look like? Now, I'm not saying you can't improve some of these things, and that's what Mary finally arrived at.

Mary finally said, you know what, Ralph? I need to take hold of this. I did the same thing about six months ago. I had lost a lot of weight over the last few years, and about six months ago, I really started to focus on, Ralph. You gotta get these sugar numbers down. I look at my sugar numbers in there, going up and up.

My A1C is growing. And I said, you know what? I wanna have longevity. I wanna have the ability to be with my wife and enjoy. I don't have any grandchildren yet, but my kids are getting older. My oldest is married and it wouldn't shock me if we had grandchildren in the next 5 or 10 years, whatever that looks like.

I want to enjoy that. I want to have the virility to be able to enjoy that. So I'm not saying that you can't change this dynamic, but it's part of the piece where you've got to really think about it and say, Hey, here's the reality. Now, once you get past the financial and the health sides, it's time to look at your retirement goals.

And this is where you're looking at that. What are your plans look like? Because your retirement goals are gonna play a significant role in determining when to claim your social security benefits. You've got to consider these things. Maybe you're one of these people that's gonna work part-time and listen, if you plan to continue working part-time in retirement, you might not need to rely on social security benefits enough, and that could be a way to delay those benefits and maximize those future payments.

I've got a lot of clients who maybe they retire from that nine to five that they've worked 30 or 40 years and because they just are done with it. But they say, Ralph, look, I'm not one of these people that wants to sit at home and listen. Let me just tell you right now a little Ralph rant. I am not a huge proponent of retiring and sitting on the couch like a couch potato.

That is not good for your health. It's not good for your emotional health, and it's definitely not good for your spiritual or financial health. But I have clients that have said to me, Ralph, look, yeah, I'm gonna retire from my main job. I don't need the stress. I don't need the worry. I don't need that constant feeling like I'm in a knockout blow with Evander Holyfield.

I don't need to be that the rest of my life. Maybe I'll just retire, go get a job doing something I enjoy. I've had clients move to the beaches here in Delaware. I can think of one particular guy. He was like a nuclear person that went in and worked at nuclear plants, and now he works at the beach and he collects money from meters and he helps people put money in the meters.

And he told me when I met with him the last time, he says, Ralph, I'm loving this. It's subsidizing his income and he's enjoying it. He's getting outside. It's a seasonal job, so he's not doing it when it's 20 degrees out. He gets outside, he gets to enjoy the sunshine. He gets to enjoy people being around him.

Well, if you're in that situation, then maybeyou wait for those social security benefits 'cause you don't really need the money. You let it grow. Again, you're looking at your financial, you're looking at your health, but then you're looking at what is your retirement goals. Now maybe you've got travel and hobby ideas.

Listen, if you plan to travel or pursue hobbies that require additional income. Then maybe you need to start claiming your benefits earlier because you're like, wow, I really wanna do this. I want to go, here's my bucket list. I wanna go do this. I wanna go see this. I wanna spend time with my grandkids.

But unfortunately, I don't have a ton of resources to do this. I don't have a huge pension. I don't have a huge IRA. I don't have a huge 401k. But if I tapped into those social security benefits, I could live a more well and a more fulfilling life. That's an individual decision. There's nothing wrong with making that decision.

You might say, look, this is what I wanna do with myself. So consider travel and hobbies. You also want to think about financial independence, and this is where like the rubber met the road with Mary. 'cause if your goal is to achieve financial independence, you don't wanna rely on those social security benefits.

You may again decide to choose to delay those benefits, to maximize your future monthly payments. It all comes down to making an informed decisions. So John and everyone else, listen. This is what it really comes down to. It comes down to making an informed decision. And it's a personal decision.

There's no one size fits all. If you thought listening today, I was gonna give you, okay, here's what you do. No matter what your situation is, go do this. Doesn't work like that. But here's the beauty of what I'm talking about today, by carefully considering your financial implications. Your health status, like we talked about, your family longevity, those retirement goals, you can make an informed choice that aligns for you and your individual circumstances and those Christian values.

So you might be saying, Ralph, okay, alright, I'm starting to get it, but how can you help me along this process? Well, I'm glad you asked John 'cause I got some questions you can ask yourself and anyone else listening can ask these same questions. Start with this, what are your financial needs and your resources?

Draw it out, put it on paper. What does that intentional spending plan, what does that budget look like? What are your retirement plans to do? Are you gonna travel? All those kind of things. That's the first question. Second question you want to ask yourself. Do you have sufficient savings and investments to support yourself without relying heavily on social security?

You know, can you delay that social security, maybe bring down some of your investments, take some money out of your annuity, take some of your IRA without without losing, you know, long-term financial benefits to those things. You've also gotta ask yourself those tough questions we talked about, what is your health status?

What is your family longevity? Do you look around and you're the oldest in your family, or do you look around and you've got aunts and uncles that just hit a hundred? I've got clients that tell me, hey, my great aunt just died. She was 103. Well, guess what? I'm like, that person's got  good genetics. That's fantastic. Well, you gotta ask yourself that question. Ask yourself this question, do you have any health concerns that might affect your life expectancy? Like Mary had to say, you know, Ralph, I've got this type two diabetes. I've got this high blood pressure. If you look at the actuarial tables, then maybe she wouldn't have lived as long, but she made an informed decision.

What does your family history look like? What are your retirement goals? We talked about, you know, do you think you're gonna work part-time? Do you wanna travel? Do you wanna pursue hobbies? What does that look like for you? Are you going to need extra income? And now I want to land on something that you're never gonna hear in secular podcasts.
You're never gonna hear this on secular shows, but that's how does claimant early align with your Christian values? You know, I'm gonna bring it here on Ralph. So this is what I'm gonna talk about. Now you have to ask yourself a real basic but fundamental question, are you being a good steward of your resources and trusting in God's provision?

So John, let's talk about that. Let's look at this decision from the perspective of faith. I'm not gonna spend a lot of time here, but I think it is so crucial and it's the central part of the show because here's the truth, as Christians, our financial decisions should be guided by biblical principles.

That's what we started. We started with that Bible verse that talked about that. We've gotta have that commitment to stewardship. And here's the thing a lot of people don't want to tell you, but I'm gonna bring it 'cause I wanna be transparent. I want to tell you how I really feel. Social Security is a program designed to provide a safety net for those in retirement.

Hear me on this. It's a safety net. It was never intended to be the sole source of retirement income. Now, there's a lot of people that argue with me. There's a lot of people disagree with me. They say Ralph, this social security, I paid into it my whole working life. But here is the honest to God truth.

Social Security was never intended to replace all of your retirement income. It just wasn't, that wasn't the thought. When they came up with the Social Security, I think it was back in the 1930s. That was never the intention. They never said, Hey, we're gonna create this investment vehicle that we're gonna make people pay into, and it's gonna be a hundred percent replacement for their retirement income.

Just wasn't, the truth is it was intended to be about 30% of their retirement income. Now I know what you're gonna say. I've got this aunt, Ralph, she only lives on social security. I got this uncle. They only live on social security. My parents are only living on social security. Maybe you're listening to it right now, and you're only living on social security.

But that was not the intent of it. So Ralph, you say, okay, well how does that affect my Christian walk? Well, here's the deal. As Christian stewards and hear me on this, it's very important. We're called to be responsible for our own needs. That's just what we're called to do. We're called to be responsible for our own needs.

We're also called to make wise financial decisions that align with our faith and values. So now you're saying Ralph, John's thinking this. John, you're, you're probably thinking, well, whoa, dude, where are you going with this? Well, now just arm you with your faith. So here's the first, let's talk about this faith.

Let's walk through this decision point, right? First thing to consider. Planning for the future, and this is why this particular episode should be shared with people. I don't care if they're getting ready to retire, they could be 20 years old because the thing I'm gonna talk about next is all about planning.

Look at the book of Proverbs, chapter 16, verse three. It says this, we started with this, "Commit to the Lord whatever you do, and He will establish your plans." So at the front end, this verse is encouraging us to seek God's guidance in our financial planning. Well part of our financial planning is social security.

And we've got to think through those long-term needs and make wise choices that align with our faith and values. We need to come up with that realization at the front end. What I just said a few minutes ago, social security is a safety net. So if you're 20, if you're 30, if you're 40, if you're 50, you're listening to me right now.

Social Security should not be your only plan for retirement. You might not like to hear that, but it is a truth bomb. It can be a part of it, and it can be a valuable part of it. But it should not be the end all, be all. Second thing, you need to consider what I'll call stewardship and the common good. See, this concept of stewardship calls us to take care of the resources God has given us.

One of those resources is our finances. So when we're thinking about social security, we're gotta think beyond our own needs. But also we have to think, and this is not a popular thing to see, but again, you're here for a Christian finance show. It's not secular. If it was secular, I wouldn't even bring this up because it's like, Hey, let me get everything I can.

It doesn't matter. But as a Christian, we've gotta think beyond our own needs. We gotta think about how that social security was intended to be a safety net. How that's supposed to be a common good. It's a long-term plan for everyone. So we gotta build that into our thought process as we work through our decision point.

Another thing you gotta consider, and that's work, retirement, and God's purpose. And the truth is, social security provides for retirement. That's what it was intended to do. But a lot of people are not gonna like what I'm fixing to say. My grandfather used to say that. What are you fixing to say? And here's what I'm fixing to say.

The Bible doesn't necessarily advocate for the complete cessation of work. That's a big word, but it doesn't advocate for us to just stop working. I say this all the time. I truly do not think that we're supposed to just stop working. And I'm not saying in the sense of a daily job, but I will tell you from experience, my clients who have have quit working, they've retired and they become couch potatoes.

They don't last long. You see physical health issues, you see emotional health issues. You see spiritual health issues. Obviously, you see financial issues because maybe they didn't plan so well. So one of the key takeaways as we think about this from a Christian perspective is even in retirement, now, this might not mean a nine to five job, but we got to think about how can we serve others?

How can we serve God and use our times, our talents, and our resources for his purposes? It is so crucial that we do this. Now, the fourth thing to consider is this, in this planning and this decision about social security. You probably weren't expecting me to go on this tangent, but I think it's so crucial.

It's like I said, all the other things were very secular. This is very Christian based. The fourth thing we gotta consider is taking care of our needs. And like I said, social security provides a safety net. At the end, we're also called to be responsible for our own needs and those of our families. This is what it says in the Bible.

This is 1 Timothy chapter 5, verse 8. It says this, and this one is harsh. "Anyone who does not provide for their relatives, and especially for their own household, ready for this one, has denied the faith and is worse than an unbeliever" I wanna say, is ouch. That one cuts it. It cuts, doesn't it, John?

But think about that. That verse emphasizes the importance of planning for our future. It's just not a decision that you make at 62. You had to have been planning all along. So if you're listening to this or you know somebody that's in their twenties or thirties, hey, send them this message. Send them this episode because this is the time to start thinking beyond what's going on today.

But this verse, it really enforces the importance of planning for our future and ensuring that we have those resources to meet our needs without completely relying on government assistance. That's not what God intended for us to do. And the final thing we've gotta consider, a lot of people get wayward and sideways on this one, and that's trusting in God's provision because here's the ultimate truth.

This is a big takeaway from today. Our final security doesn't rest in social security that can be on our earthly provision. It's part of it, but our ultimate security rest in God's faithfulness. Let's look at Proverbs chapter 3, verses 5 and 6. It reminds us this. And this is one of the most beautiful verses of the Bible.

It says, "Trust in the Lord with all your heart and lean not on your own understanding; don't lean on your own understanding and in all your ways submit to him, and he will make your path straight." So John and everyone else listening, as we make financial decisions, as we make this decision about social security, the first thing we've got to pray about, we've got to seek God's wisdom.

And trust in his provision for our needs. That doesn't mean we just throw our hands up in the air and say, well, the Lord will figure this out. I'm gonna go ahead and take that first off ramp at 62, and man, if the Lord intends it, I'm gonna live to be a hundred and I'm never gonna run outta money. It's not what I'm talking about.

That trust goes from when you started paying into the system. What are you doing? How are you spending your money? What does your budget look like? What does your intentional spending plan look like? Those things are all part of that trust. You can't just throw your hands up in the air and say, well, the Lord will provide.

That's great. Mentioned this the other day on the show, the Lord provides for the birds, but guess what? They've gotta leave the nest and go find food. You gotta do the same thing. But see, here's the bottom line, John. John in the end, and I know you're hearing me on this one, it's not a simple decision. It's a deeply personal decision though.

And like I've mentioned, it's intertwined with financial realities. It's intertwined with a spiritual consideration. And the thing you've really gotta be careful of, you gotta be careful of that instant, that immediate gratification of receiving those benefits early, because that can seem appealing.

Listen that's enticing for a lot of people. A lot of people are like, Ralph, you know, dude, I'm taking this 62 because we might run outta money. The world can end next week. I could die of cancer a year from now. All those things are true, but are you really looking at the potential long-term consequences?

So as Christian stewards, as Christian people who are following Christ and are trying to live by a set of ideals that maybe are a little bit different than the world, we are called to exercise wisdom and planning for our future while trusting in God's provision. That is the key. That's the secret sauce of this.

So consider your individual circumstances, seek Godly counsel, and one of the things I should have mentioned at the beginning. is pray for that discernment. Pray for God, say to God. It's a real simple thing. Say, God, listen, I got this decision to make. What should I do? What should I do as it relates to social security?

And he will speak to you. He's not gonna come like a voice of heaven. Like I said, you will. It's not gonna happen. That's not,I don't think that's a reality. Some people will say that, I've never experienced that. But you'll be able to make a choice to honor God. He's gonna open up doors.

Maybe he puts you in touch with somebody like me or a financial advisor that you trust in your area. Because God will provide for your needs and He allows us to live out our purpose in retirement if we let him guide us in that,


Now, you might not believe this, but I've got even more resources in my blog post to today.
You can check that out at askralphpodcast.com/blog. I go into more detail. I talk about some specific resources you can use and some additional valuable information that I wasn't able to cover in the show that you're like, Ralph, you talked for a long time, dude. I figured you covered it all. But no, believe it or not, there's actually more.
I do one of those for every show.

So John and everyone else, listen. Let's talk about some reflection questions. You know, one of the things I like to do here at the end is I like to meditate on what we've covered today. So, first one, John, this one's directed right at you.

What are the primary factors influencing your decision to claim social security benefits early or later? I hope with, after listening or viewing today's show, you've got some thoughts. You've gotta, maybe you come away with more questions than you have answers. I had many clients that come into me and they say, Ralph, I come into you to get questions answered, and I leave with more questions than I came in with.

And I say to them, that's good. You're thinking, you're ruminating, you're reflecting on this decision. So that's the first question. You know, what are the primary factors influence your decision? Is it your health? Is it your financial needs? Is it your family's longevity? What is it for you?

Second question. How does today's discussion align with your personal financial goals and those Christian values? You might not have thought about that before today. You might have said, Ralph, I thought this was a real simple decision. You know, do I take the first exit at 62? Do I take the full retirement exit or do I hold a line and wait till I get to the final destination?

But now I've given you some other things to think about that personal financial goal and those Christian values, they're so critical in this decision. And I always leave with the third one. This one is the important one. This is the action steps. So what immediate steps can you take to better prepare for your retirement and ensure your financial security for the future?

Maybe you're listening to this and somebody said, Hey, you gotta listen to this guy, Ralph. You know, he's got some great ideas, but I see the title and say, Social Security, Social security is 30 or 40 years from now. But what can you do right now to make the best choice to get you to that point where when you're at 62, you can decide, make an informed decision?

See, this doesn't start when you're 59 and 60 and 61. A lot of people just put it up. Ah, I'll worry about that later. I've been a guilty of that myself. This is a decision point that is based on all these other decision points. You know, when you start, I talked a little bit about that interstate. See this started way back when you were born.
That interstate was drafted. At that point, you had a bunch of different off-ramps. You had the, the first thing in the high school graduation and college graduation, maybe getting married, having kids. All of those things you're building to this, what we call the music crescendo, this big decision point.

But all of these pieces are all about what I talk about all the time on the show. It's that journey. So what steps can you take to better prepare for that retirement journey now and assure that you have that financial security in the future? You don't wanna be like Mary's parents who struggled. You don't want to be like those people who are living on that only they get that social security check because let me tell you right now, that is not a retirement that you want

Now, if you find value in today's show, I want you to consider supporting us. You can do that at askralphpodcast.com/support because here's the truth, your support allows us to reach more people.

It allows us to be on more networks. It allows us to be on more platforms with this message of hope, this message of Christian financial beliefs and Christian financial values. It helps us grow the show. It helps us impact others who are dealing with the same things you're dealing with, John and other people listening.

It helps us help them navigate those, those difficult financial decisions. And by supporting the show, you're becoming a partner with me to help someone who may be facing the very same issues we discussed today. So why don't you consider that? Again, go to askralphpodcast.com/support. So John, in the end, just remember these key takeaways.
Claiming social security can lead to a permanent reduction in your monthly benefit amount. Delaying social Security can result in a significant increase in your monthly benefit amount. You gotta consider your financial needs, your health status, your family longevity, and your retirement goals. When deciding what's best for you, and listen to me on this one, seek God's guidance and make that decision in alignment with your financial decisions as a Christian person with Christian values and Christian principles.

Now, John and anyone else listening, if you're struggling with how to make this decision of when to claim Social Security, you don't have to navigate this alone. Maybe you've listened to this show, maybe you went back and listened to it again, and you're like, Ralph, I still don't understand exactly what I should do.

Well, that's okay. This is what I do for a living, you can book a call with me. Just go to askralph.com. At the top of the screen, you'll see a button that says, book a call with me. And let's create an individual plan for you. Let me bring you in, let's, we can do it on Zoom. If you're not in the area here, I do a lot of work on Zoom.

I can talk to anybody in the world about this. Let's create that individualized plan that's tailored to your unique circumstances, because as I said, this is a decision that is very personal. Let me help you get to that point of having that financial peace of mind, because remember this. Taking the first step is crucial in achieving your financial goals.
And for you, maybe that first step is booking a call. So I'm encourage you to do that. Go to askralph.com and click on book a call with Ralph.

Well now let's get to our mailbag. I added this section to the show, and it's funny since I added it, more people are sending in quick comments and I'm gonna encourage you to do the same thing because I want to talk for just a moment at the end of the show about how this show is helping others, how it's impacting people.

I want you to understand the power of this. So I got this quick message from Georgianna, and she said this, she said, 'Ralph, your show has been a lifesaver for me. The practical advice in Christian principles, Christian perspective have given me the confidence to make better financial decisions. Thank you.' Well,  Georgianna, thank you.

This makes my heart glow with knowing that what I'm doing is making an impact. And  Georgianna, you're the one making the decisions. You're the one that's acting on that advice, so I'm so happy you're finding confidence and I'm so happy you're making better financial decisions. Then we got this letter from Kyle.

Kyle said this, it actually was an email. I wanna be clear about this. 'Listening to your podcast has not only improved my financial situation, but also strengthened my faith. Thank you for your wisdom and guidance.' And Kyle, man, there are days when I need those hugs. And dude, that was a big hug for me. This is why I do what I do, because Kyle and everyone else, listen.

I truly want to hear from you because your stories, your feedback, they keep me going. They help me continue to produce this daily content. I wanna reach you, I wanna help you. That is my mission field. So do me a favor. If you wanna share something of how this show's impacted you, how it's affected your life, or maybe it's affected someone around you, do me a favor and just write me a quick email.

You can send that to ralph@askralph.com. Again, that's ralph@askralph.com. And I'm not gonna share with anybody if you say, look, Ralph, this is just between you and I, I just wanted to tell you, this is what I'm doing now. Or, and it can be something simple like, Ralph, I did this. Now I'm writing a budget now.

All of those things I wanna hear from you because that's what keeps this fuel going. It's what keeps me excited about bringing you new content every day. Well now tomorrow we're gonna be discussing another hot topic. And this one is really interesting. When somebody sent me this question about this, and I thought this was really, it's something I don't hear talked a lot about, and that is, is the 30% rule for housing cost still a wise guideline today we're basically gonna look at how much of your monthly income should you be spending on, on your housing cost.

Generally the rule was 30%. But on tomorrow show, we're gonna talk about whether that is really true anymore. I'm gonna provide you with some insightful information in that episode. So thank you again for your time today. I thank you for supporting this show. You truly are the partners in this. We're working at this together.

And remember this, my passion is to help you achieve financial success. I wanna see you live out your dreams and I wanna see you grow in your faith. And I know together, working together, whether you partner with me, whether you share an experience, whether you share a question, we can master your finances from a Christian perspective.

So as I always end the show, stay financially savvy out there and God bless you abundantly.

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