Nikki Foley: So Jeff, I was gone last week and Jack and Ellie filled in for us. Do you want to tell our listeners where we have been and what we’ve been up to for the last four months here?

Jeff Foley: Yeah, we had a unique experience. The last five months we’ve been training for an event. We went out to Sun Valley, Idaho—beautiful town if you haven’t had a chance to visit there. It’s called 29029 Everesting, which is a mouthful, but it’s basically an endurance hike. We hiked the equivalent of climbing Mount Everest without as much risk of death, if you will. At this particular mountain, it was 15 hikes up, gondola down, so 15 loops of that. We had 36 hours to complete it. Awesome community, great people. There were about 300 people at this particular event, and it’s a very charitable-minded organization, very giving, everyone very supportive. So it’s quite the experience for us.

Nikki Foley: Yeah. And I think it’s set up where—and I don’t want this to come off in a bad way—but it is a bougie endurance event where the founders of it set out to create something where people who maybe have never done an endurance event or exposed themselves to doing hard things like that, they set it up so it was turnkey. And that really was the part, I think, that I knew I had a training program. I knew that I had coaches that I could get on a call every week and listen to them, and they set us up for success. Their big motto, and the thing that we heard leading up to it, is “believe in doing hard things.” And while I don’t know that that’s why you and I signed up for it, it was a good opportunity for us to take a step back from our everyday life and do something—that bonding time. Absolutely. It’s a good chance for us to step back because there really are fewer and fewer opportunities to step outside your comfort zone. It puts you in a place where you’re doing something you love to do. We love to do hiking, but it is a challenge. Then they have everything set up around you so that you have the best opportunity for success. So it was good. We enjoyed it. We did it with a few other families from the St. Odilia school community, and so that was really great to have that experience as well and the community that went along with that.

Jeff Foley: Yeah. A lot of fun. I’m still sore. You’re not.

Nikki Foley: Well, it was something where you think about hiking for 36 hours—and we didn’t; we finished earlier than that. But if you set a treadmill to one mile per hour and then you have a significant incline, that was really the perspective they gave us of looking at it like that. It is just one step at a time. So it was good. It was fun to accomplish something like that. I had read the book, a couple of years ago, The Comfort Crisis by Michael Easter a couple years ago, and it gave us an opportunity to almost put that into play. And I know you—I don’t think you have read that, but I’ve recommended—

Jeff Foley: Seemed like too much effort.

Nikki Foley: I have recommended it to so many people because I do think it’s a nice perspective to the world we live in. The technology around us has moved so fast that things are at our fingertips, and you don’t put yourself into hard situations—your body into hard situations—as much as maybe historically has happened. So setting up those experiences for yourself to do hard things and getting outside of that comfort zone.

Jeff Foley: Speaking of hard things, Social Security.

Nikki Foley: Exactly. Hard is different for everybody. And so, here we go. Let’s dive in.

We have been conducting this six-part series in which we’re breaking Social Security down into bite-sized pieces. Social Security can be one of the most important pieces of somebody’s retirement, and understanding how it works isn’t always easy. So that was a great segue, Jeff Foley. Sometimes you are just the wit that comes out of you.

Last week, Ellie and Jack kicked this series off for us, and they really went through an overview of who Social Security is designed for, what it is, where the funding comes from, and how an individual earns benefits. So that who, what, where, when, how is what they covered.

What I want to do today is really dive into the worker’s retirement benefits. The goal is simple: to help our listeners better understand the system, know the benefits that are available to them, and then help make more informed decisions as it relates to Social Security as part of the overall financial plan that they have. So with that in mind, let’s kick this off, if that sounds good.

Jeff Foley: Yes.

Nikki Foley: So Jeff, really this has been your show for so long. You started the show, we’ve done well over 300 episodes, and you have been featured on most of them. So I feel like no introduction is necessary, but I’m going to put you on the spot and ask you the same question that all of our advisors are going to get asked as we intro each one of these episodes.

Today I want your perspective. What is the number one question you get related to Social Security, and what is your answer?

Jeff Foley: The number one question, I would say by far, is, “When should I file for Social Security?” And the answer is: it depends. Not to be a letdown, but it really does depend. There are so many moving parts, and I think we’ll probably talk a little bit about that today. But it really depends on your situation.

Nikki Foley: You and Jack are two peas in a pod. I didn’t tell you what he answered. He answered it exactly the same way: it really is “it depends.” And he also said, “What a letdown.” So you can tell you two work very closely together.

For many Americans, Social Security serves as the cornerstone of their retirement income, and the key is it provides a guaranteed source of income. There are some statistics that I want to share with you. This is from July of ’26. The Social Security Monthly Statistical Snapshot reported that nearly 58 million people from the baby boomer and silent generations are currently receiving Social Security retirement benefits, and that totals more than $117 billion in benefits on a monthly basis. That is significant, and you can see what a role that plays in our lives and that foundation that we’ve been talking about related to retirement income.

As I mentioned before, Ellie and Jack set the foundation last week. I want to briefly remind you that one of the things they covered is that a worker, to be fully insured, has to earn 40 credits by working at least 40 years—and that’s assuming that you earn the full—

Jeff Foley: Yeah.

Nikki Foley: Oh, sorry. Thank you. Forty credits in 10 years, making the assumption that you get your four credits per year. The amount you receive is based off of an average of 35 highest-earning years throughout the course of your career.

That’s just some foundation, but I don’t want to go too far backwards and repeat what they’ve said. I’m going to ask you fresh questions, but I want to remind our listeners that if they’re coming into this a little bit unclear and unsure of the foundation, really go back and listen to that episode with Ellie and Jack, which is Episode 345.

So Jeff, let’s start with you. What if someone doesn’t meet one of those thresholds that I just briefly mentioned there?

Jeff Foley: Yeah, the starting point is you want to understand where you are at in that earnings curve and being able to qualify for the benefit. So you want to set up your Social Security account. Go to ssa.gov, set up your account, and you can actually view it. Years ago, they would mail the statements from time to time, and it was all over the place. But they actually update your Social Security statement every single month. So if you’re still working, those numbers are going to change over time.

Figure out where you’re at. As you mentioned, Social Security looks at your highest 35 years of earnings that were subject to Social Security throughout that period, and they adjust over time because you think of wages you earned decades ago compared to now. They’re adjusting those earlier earnings for changes over time.

They come up with a number called the AIME, which is your average indexed monthly earnings. That is then used to compute what’s called your PIA, or your Primary Insurance Amount. That’s the key number that you use to determine your benefit. So your PIA is simply what you would receive on a monthly basis if you waited until your full retirement age. You want to know that number, and it’s pretty clear on your Social Security statement. If you look at the bottom part of the first page, you can see what that amount is going to be.

But you don’t have to figure this out on your own. Again, that statement is updated for you every single month. Back to your question, this is where that work history really matters. So that highest 35 years—if you don’t have 35 years of earnings, let’s say you’re five years short, those missing years effectively become zeros in the calculation of that PIA amount for you. Any new higher-earning years, you’re dropping off the lower ones. If you have a new year, you drop off a zero or a lower-earning year that’s used in that calculation, and that will help to increase your future benefit.

So if you did, over that period of time, miss a few years—let’s say you stayed at home and raised kids—it’s not like you’re completely out. It’s just you’re going to get a zero or maybe a low number for that period of time. If someone has been a household manager while a spouse or partner has been working, they’re the primary earner, there are other opportunities to use their income for your benefit as well through what’s called spousal benefits. That applies even when a divorce has occurred, as long as you were married long enough. You also have widower’s benefits as well, which we’re not going to get into today. But those are some other scenarios that you want to consider.

Nikki Foley: Yeah, absolutely. In fact, we’re going to spend the next couple episodes digging into those scenarios more specifically. While today is about retirement benefits and the worker specifically, we don’t want to overlook some of those scenarios. So we’ve dedicated—

Jeff Foley: One step at a time, using our mountain analogy there. This whole episode could be full of these. We’ve spent a lot of time together.

Nikki Foley: This whole episode could be full of these. We’ve spent a lot of time together. So Jeff, once we know what someone’s benefit could be, the next decision is when to take it. Walk us through what happens to a worker’s benefit if they claim it at 62, at full retirement age, or wait until age 70.

Jeff Foley: Yeah. So you can take it as early as age 62, delay as long as age 70. If you delay between age 62 and your full retirement age, which for most people is going to be age 67, give or take, your benefit during that period of time is growing at roughly 6.25%, depending on when you’re born, up until your full retirement age. And if you delay beyond that, it’s growing at 8%. That’s simple interest in both of those situations. But 6.25% and 8%—that’s a pretty good incline as well over time for you.

Nikki Foley: So I picked up on that one.

Jeff Foley: Good, good.

Nikki Foley: Well, what if someone wants to claim Social Security but continue to work? Because that really is a scenario we see a lot—people are working longer than they used to.

Jeff Foley: Yeah. These numbers change every year, but you have an earnings test where, if you’re under full retirement age—so less than age 67, 62 to 67—in 2026, you can make up to $24,480 of earned income. So not investment income, earned income. If you earn more than that, they’re going to hold back $1 of benefit for every $2 that you’re over that limit. As we’ll talk about, you’re going to get that money back later.

But once you reach the year of your full retirement age—so let’s say your birthday is in October of a particular year—that earnings limit from January up until October in that year bumps up to about $65,000, and the penalty is decreased. It’s $1 for every $3 that you’re over the limit.

Once you get to your birthday that year, you’ve reached your full retirement age. You can make as much as you want. You’re still going to be taxed, obviously, but they’re not going to withhold any of your benefits. So this withholding of the benefit is different from what you’re being taxed on. That’s important to know.

Nikki Foley: So we’ve talked a lot about this starting age, and there’s also the circumstance where maybe you get into it and you want the benefit to stop for some reason. It was a wrong decision. There could be all kinds of scenarios, and I’m sure you have examples that you could even share from everyday working with people.

Walk us through the difference between if you want to withdraw an application, expand on this earnings test, and then also if you want to voluntarily suspend the benefits. What can you do?

Jeff Foley: Yeah. So the first would be what I would call the mulligan, where you withdraw your benefits. You filed, and this is a one-time opportunity. You have to do it within the first 12 months of having received the benefits, and you have to pay all of those benefits back—not only yours, but if there were any spousal benefits or any family benefits that were generated off of that, they have to be paid back as well. There’s no interest on that. It’s very rare that someone decides to do that because they don’t want to pony that money back up, but we’ve had a handful of clients that have done that over the years where they decide, “Hey, after looking at the numbers, gosh, I’m missing out on a lot of money by taking it sooner.”

So you have that one-time option. There’s a form for that. It’s SSA-521, which is Request for Withdrawal of Application, and that would enable you to do that.

Second, the earnings test that you mentioned—it’s not a voluntary strategy, but if someone claims Social Security before full retirement age and they continue working with earnings above those earnings limits that we were talking about, you’re still going to get back the benefits that were withheld. But it’s going to start once you reach your full retirement age, and they’re going to kind of spread that butter over your life expectancy. So you will get it back. But that does surprise people sometimes. They file for Social Security, they make a lot of money, and a lot of that benefit is held back, and it’s a shock there.

The third is what’s called a voluntary suspension. So this applies if you’ve reached your full retirement age—in our example, 67—and you decide, “You know what? I don’t need this money anymore,” for whatever reason. You can stop your payments, and what you were receiving will continue to get credits going forward. They’re not going to go retroactively and give you credits for all the time that you were receiving those payments. But when you stop the clock, it will get deferred credits from that point, and you could delay, say, up until age 70 and not have to repay anything. So that’s a situation if someone’s income needs have changed. They started collecting the benefit, they get to full retirement age, they could put things on hold and come back to it later.

Nikki Foley: So you really did give three options on if your scenario has changed, your world looks different, you could prevent or stop receiving payments. In any of those scenarios, just to make sure I have clarification on those, is the money actually lost for any of those three?

Jeff Foley: No. No, good question.

Nikki Foley: I want to back up to one other thing that you said. When you were giving those percentages of, with each year you delay, it’s a fairly significant increase to the amount that you will receive. It’s also inflation adjusted, and there really are not a lot of other tools out there that you can use with that same type of benefit. Any perspective that you want to lend to that?

Jeff Foley: Yeah, that’s a really good point. Depending on what’s happening—particularly if the stock market is falling apart—if you could get 6.25% plus cost-of-living adjustments, that’s pretty significant. And I want to point out as well, you don’t have to wait a full year to get that 6.25% or that 8%. It actually ratchets up a little bit each month. But that can be a substantial difference.

So the key is, in deciding when to file, it’s not just what my payment is, but how many payments am I going to receive? There’s a lot of math involved in figuring that out. What’s the optimized strategy?

Nikki Foley: And so that actually does bring me to a point that I want to make, and then we’ll circle back to it. One of the things that we do in each one of these episodes, especially that goes along with our series, is we offer a complimentary tool that will help assist in whatever our topic is.

This month we’re offering our Social Security Maximization Report. It’s a download that they can make available on our website. They can see what that report looks like. Then we’re offering to personalize that for all of our listeners. Anybody that wants to set up a 15-minute complimentary consultation call with us, we’ll actually personalize that.

It really is a numbers conversation that we’re having here. You mentioned age 62, full retirement age, and 70, but it’s not always one of those numbers. An optimized path could be different from that, and that’s what this report shows us along the way. So just because you had shared that, I wanted to go ahead and mention that that is our offering this month.

Based on our discussion today, Jeff, do you have any recommended resources for someone who is listening who might want more information about what we’ve talked about?

Jeff Foley: Yeah. A good starting point would be the Social Security Administration website, ssa.gov. Before you even create a login, there’s a search button in the upper right-hand corner. As it relates to what we’re talking about today, you just type in “retirement benefits,” and there’s a lot of information. Sometimes it’s not always the easiest to get through, but retirement benefits is a good place to start there.

Secondly, as we talked about, if you haven’t yet created your Social Security account, you want to do that so you understand what benefits you have available to you. But also, that helps increase the security. If you set up that account, it makes it harder for someone else to get in there as you.

There are also a number of calculators out there to help you calculate your benefits and tradeoffs between those different amounts. So as you mentioned, our complimentary Social Security Maximization Report—that’s going to be a calculator to look at just Social Security. It’s kind of like a magnifying glass to identify benefits and tradeoffs of filing at different points, but that doesn’t look at your full financial picture.

Going back to your first question of, “When should I file for Social Security?” the reason it depends is you have all these other moving parts. You have earned income. You have taxable investments, Roth conversions, you’re realizing investment gains, you have required minimum distributions. All these things factor in Medicare. So we want to understand the big picture, and that would be the next resource: have a good full financial plan that looks at all of those inputs, and you’re not looking at Social Security by itself.

Beyond that, simply Googling or ChatGPT or whatever your AI tool of choice is—you could have it generate a list of questions that you should ask about Social Security and what those answers are. That would be beneficial.

Then we have a number of resources as well. We have our Social Security Maximization workshops, our live events that we do. So if you check out our website, we have those listed, and you can actually attend an event and learn more about Social Security. We’ve done webinars and previous podcasts on this as well.

But I think the best thing, ultimately, is come in for a Complimentary Consultation where we can dig in and customize things for you. I would caution people: a common mistake I hear is, “My parents did this,” or “My neighbor’s really smart, and he or she said I should do that.” They don’t know anything about you, and the fact that they filed at a particular time doesn’t mean they made the right decision for them. It really is a customized decision.

Nikki Foley: Yeah, absolutely. And Jeff, I think that just brings us to wrapping up and talking one more time about that complimentary Social Security Maximization Report that’s personalized.

So if you are interested in that, I highly encourage you to go to paladinfinancialtalk.com, where you can see the sample report. If you would like to take that next step for us to personalize it and have a conversation with you, you can book a 15-minute phone call right on our website by clicking on that booking link in the top right-hand corner. Again, that’s a 15-minute, no-obligation conversation to help you get clarity around this conversation that we’re having today and to get that complimentary report.

Again, visit our website at paladinfinancialtalk.com, where you can listen to more on our last episode with Jack and Ellie, where they set the foundation, where you can get this simple download, or go ahead and book for that 15-minute, no-obligation conversation. You can also just call us at our office at 651-842-8406.

And we hope that you continue to follow along on this conversation because you’ll hear some really good bits and pieces as we post this on social media, where you start to take things in bite-sized pieces. So listen to YouTube, look for us on Facebook and Instagram and LinkedIn, and we hope that you’ll continue to follow along as we go through this six-part series on Social Security.

Thanks for listening, and we’ll see you on the next episode.