8 Suze Orman Takes on Social Security You Should Listen To

Enacting your retirement plan can come with lots of joy, but it can also be a time of big decisions. One of those is when to start taking Social Security benefits. While it might seem minor, it's a decision that could have a big impact on your finances in retirement.

Financial expert Suze Orman has a lot to say about timing and other issues related to Social Security.

Orman is a big fan of waiting beyond age 62 to claim Social Security. If you start claiming at age 62, when you can start doing so, your benefit will be permanently lower than if you wait.

To put it in perspective, your benefit will be 30% larger at full retirement age and 76% more if you wait until age 70. However, you can choose between 62 and 70 years old to start claiming if it works best for your personal situation.

Here's Orman's suggestion for a married couple: Have the highest earner delay filing for as long as possible. When one spouse dies, the surviving one only gets one benefit — either their own or the deceased spouse's benefit.

Orman said it makes sense for the highest earner to wait to start Social Security until age 70 so the surviving spouse receives the largest possible benefit.

Or perhaps we should say work during the delay. Orman strongly supports working longer and delaying when you claim Social Security and start living off your savings.

These decisions could pay off big time when it comes to living in retirement. You could stay at a job you enjoy for some more years. Or consider a job change that is less stressful but provides the financial support you need.

Orman suggested that one mistake many people make is to tie their claiming decision to when they retire. That means if they want to retire at age 65, that's when they may consider starting to claim Social Security.

However, Orman advises relying on other assets instead of grabbing your Social Security benefit. Those other assets could be your 401(k) and IRAs. 

This could be part of your overall retirement planning strategy to help stretch your money and keep you more comfortable after you stop working.

This can be a bit complicated, but there's a good chance you will owe income tax on some of your benefits once you start collecting Social Security. The only way to avoid this is to fall below specific combined income amounts.

This is separate from the earnings tax you may feel if you claim Social Security before your full retirement age and are still working. Also, regardless of income level, you won't pay income tax on your full Social Security benefit.

Orman thinks many people are selling themselves short when it comes to retirement and lifespan. With people living longer today compared to the past, that means more time spent in retirement for many individuals and couples.

Remember, when you start claiming Social Security benefits in your early 60s, you may need to support yourself for decades. That's why Orman suggested it may be a wise financial move to put off claiming benefits for as long as possible until you reach age 70.

You may have heard friends or family members express fears about the future of Social Security. Perhaps they've expressed concerns that Social Security will not exist.

Orman said payments will still be made even when the fund is depleted. Though those payments may be reduced, they will likely be far from zero. 

That means planning for when to take Social Security benefits and how to live comfortably after retirement is still important for your finances.

You may have heard discussions about raising the full retirement age to help address Social Security funding problems. Lawmakers who support the idea have said it would be for younger Americans and not near-retirees.

Orman said the same happened 40 years ago when the full retirement age was moved from 65 to 67. Keeping a historical perspective in mind can be helpful as you plan for your own retirement.

Recent discussions about Social Security's future have led to increased fears about claiming benefits.

While there are certainly some advantages to waiting to start claiming your benefits, it can be a decision that very much depends upon your personal situation. 

It may be helpful to talk it over with your financial advisor, particularly regarding tax implications, to learn how to best protect your wealth.