Will You Maximize Your Social Security Income? Or Choose Poorly? | Julia Lembcke

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**Adam Taggart** (0:58)
You haven't hit Social Security qualification age yet. It's one of these things you know you have to deal with. It's kind of hanging out in the back of your brain.
For a lot of people, I think they just think like, well, I'll just take it when I'm old enough to take it. It is not nearly that simple, is it?

**Julia Lembcke** (1:15)
No, it's not. There's 96 different months that you could choose to take your benefit, and it could have big impacts on your overall financial plan, so it's certainly a big decision.

**Adam Taggart** (1:30)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. I'm very excited to welcome you to this discussion on a very important topic for virtually all the viewers here. We're going to be talking in depth about Social Security strategies for thinking about how to take it. There's a whole lot of considerations.
If you are already taking Social Security, you might learn something in here too about perhaps some changes you might want to make or some certain qualifications you want to be aware of. We're going to be doing all this under the guidance of the wonderful Julia Lembcke. Julia, how are you doing?

**Julia Lembcke** (2:06)
I'm great, Adam. Thanks. How are you?

**Adam Taggart** (2:08)
I am wonderful. Thank you so much for joining us again.
Julia, when you joined us before to talk about the sequence of retirement accounts, that was your first appearance on this channel and it got just a ton of rave reviews from this audience. It's just being some really valuable, really practically valuable guidance. There's a clamor from folks for more of that, which is why we're tackling Social Security right now. Folks, if you didn't watch that first video with Julia, she's a certified financial planner and she is the managing director of URS Advisory, a financial advisory firm for high net worth individuals. She is going to share all of her expertise on Social Security with us as we go through the next hour plus here. Julia, it's one of those topics where people, if you haven't hit retirement age yet, or if you haven't hit Social Security qualification age yet, it's one of these things you know you have to deal with. It's kind of hanging out in the back of your brain.
And for a lot of people, I think they just think like, well, I'll just take it when I'm old enough to take it. It is not nearly that simple, is it?

**Julia Lembcke** (3:23)
No, it's not. There's 96 different months that you could choose to take your benefit, and it could have big impacts on your overall financial plan. So it's certainly a big decision.

**Adam Taggart** (3:32)
Okay. Well, if we can just start from the top then, what is Social Security and how does it work?

**Julia Lembcke** (3:40)
Sure. So I'm sure all of you watching know what it is, but let's go over some of the basics anyway. So Social Security is essentially a government-sponsored retirement program. Provides monthly income to eligible retirees, disabled people, and their surviving family members. It is funded primarily through payroll taxes. So if you're an employee, you're paying 6.2 percent of your wages up to an annual cap that is adjusted each year. If you're the employer, you pay the other 6.2 percent. If you're self-employed, you pay the full 12.4 percent of your wages. Again, up to the limit. There is a limit there. And unlike the money that you put into a 401k or a brokerage account or any other investment account, it's not held in an account with your name on it, right? It's part of a large trust fund. There's actually two separate trust funds that our payroll taxes go into, one for disabled people and one for old age and survivors. And those taxes are then invested in US. Treasury securities, which are used to pay our monthly benefits. And it's a pay as you go system. So the folks that are paying into the system today are actually funding today's retirees.