The Social Security Playbook: What Everyone Should Know Before Retirement

Real Estate Tips with Lana & Mark | Episode 60 featuring Lynn Toomey

Retirement planning can feel overwhelming, especially when it comes to understanding Social Security. With countless rules, misconceptions, and claiming strategies, it's no wonder so many people are unsure about when to start benefits or how Social Security fits into their overall retirement plan.

In this episode of Real Estate Tips with Lana & Mark, retirement educator Lynn Toomey, founder of Her Retirement and Her Social Security, joins the conversation to break down the basics of Social Security, explain common mistakes, and share practical strategies that can help people make more informed retirement decisions.

Why Social Security Matters

For many Americans, Social Security isn't just an extra paycheck—it's a major source of retirement income.

According to Lynn, Social Security accounts for approximately 30% to 50% of retirement income for the average retiree. For some individuals, particularly women who may have had career interruptions or lower lifetime earnings, it can make up an even larger portion of their retirement income.

That's why understanding how the system works is so important.

One of the Biggest Misconceptions

Many people assume that the money deducted from their paycheck throughout their career is simply sitting in a personal account waiting for them to retire.

In reality, Social Security is a shared social insurance program, not an individual savings account. Today's workers help fund benefits for today's retirees, making it a pooled system rather than a personal investment account.

Understanding this distinction helps explain many of the rules surrounding survivor benefits, spousal benefits, and eligibility.

Your Highest 35 Earning Years Matter

One of the most important takeaways from the conversation is how Social Security benefits are calculated.

Benefits are based on your 35 highest earning years. If you have years with little or no earnings, those years can reduce your average and ultimately lower your monthly benefit.

That means:

• Higher lifetime earnings generally lead to larger Social Security benefits.
• Continuing to work later in your career can increase your benefit if those earnings replace lower-income years.
• Individuals working in family businesses should ensure they're properly earning wages and paying into Social Security.

When Should You Claim Social Security?

This is one of the most common retirement questions.

Lynn explains the basic timeline:

• Age 62: Earliest age most people can begin collecting reduced benefits.
• Full Retirement Age (currently 67 for many workers): Receive 100% of your earned benefit.
• Age 70: Maximum benefit after delayed retirement credits.

Waiting beyond full retirement age increases your benefit by roughly 7% to 8% per year, making delayed claiming an attractive strategy for many people—especially higher earners.

However, there isn't a one-size-fits-all answer.

Your ideal claiming age depends on factors including:

• Health and longevity
• Marital status
• Current employment
• Retirement savings
• Tax considerations
• Expected retirement expenses

Spousal and Survivor Benefits

Many people are surprised to learn that spouses—and even some divorced spouses—may qualify for Social Security benefits.

Some key points include:

• A spouse may receive up to 50% of their spouse's benefit at full retirement age.
• Divorced spouses may qualify if the marriage lasted at least 10 years and other eligibility requirements are met.
• Survivor benefits allow a widow or widower to receive the higher benefit after a spouse passes away.

Another important point Lynn emphasizes is that claiming benefits on an ex-spouse's record does not notify the ex-spouse or reduce their benefit.

Can You Work While Collecting Social Security?

Yes—but there are important rules.

Before reaching full retirement age, earnings above the annual income limit may temporarily reduce your Social Security benefits.

After reaching full retirement age, you can earn as much as you'd like without reducing your monthly benefit.

Many people also don't realize that any benefits withheld because of excess earnings are generally factored back into future benefit calculations once full retirement age is reached.

Check Your Social Security Record Early

One of Lynn's strongest recommendations is to create an account at SSA.gov well before retirement.

Review your earnings history carefully.

Mistakes happen, and missing earnings can reduce future benefits. It's much easier to correct errors years before filing than during the retirement application process.

She also encourages people to advocate for themselves by asking questions, requesting explanations in writing when necessary, and verifying information rather than assuming every answer is correct.

Retirement Is More Than Social Security

The conversation expands beyond Social Security into overall retirement planning.

Lynn stresses the importance of creating a retirement income plan before leaving the workforce.

A comprehensive plan should consider:

• Social Security
• 401(k)s
• IRAs
• Pensions
• Annuities
• Rental income
• Healthcare expenses
• Taxes
• Inflation
• Long-term income needs

Rather than simply asking, "When should I retire?" people should ask, "How will I replace my paycheck?"

Retirement Is Also About Purpose

One of the most meaningful parts of the discussion focuses on life after work.

Retirement isn't simply about stopping work—it's about deciding how you want to spend your time.

Whether that's volunteering, pursuing hobbies, traveling, reading more books, starting a small business, or spending time with family, financial preparation creates the freedom to make work optional rather than mandatory.

Lynn encourages people to think about retirement as both a financial transition and a lifestyle transition.

Empowering Women Through Retirement Education

As founder of Her Retirement, Lynn is especially passionate about helping women prepare for retirement.

Women often face unique financial challenges, including:

• Longer life expectancy
• Career interruptions
• Lower lifetime earnings
• Caregiving responsibilities
• Divorce or widowhood

Her mission is to educate women before they meet with financial professionals, helping them ask better questions, identify potential gaps, and feel more confident making important retirement decisions.

Final Thoughts

Social Security may seem complicated, but understanding the basics today can help you make smarter decisions tomorrow.

Whether retirement is decades away or just around the corner, taking time to learn about your benefits, review your earnings record, and build a comprehensive retirement income strategy can provide greater confidence for the future.

As Lana, Mark, and Lynn remind listeners throughout the episode, retirement isn't just about reaching a certain age—it's about creating the financial flexibility and peace of mind to enjoy the next chapter of life.

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