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"What's right about America is that although we have a mess of problems, we have great capacity—intellect and resources—to do something about them."
— Henry Ford II
Guaranteed sources of income in retirement provide peace of mind regardless of what the market is doing—and they continue paying out for as long as you live. The first source of guaranteed income that most retirees are eligible for is Social Security.
Think of Social Security as a government-run pension plan. The government had to do the same things your company did with its pension: collect contributions, invest the money, make assumptions about returns and longevity, and pay benefits out for a lifetime. Just like many corporate pension plans, they made some miscalculations along the way.
~1/3
Average share of retirement income from Social Security
90%
of Americans 65+ receive SS benefits
$1M+
cumulative lifetime benefits for couples
For many autoworkers, expenses may be largely covered by Social Security combined with a pension—allowing other assets to keep accumulating. But, like the pension decision, when to claim Social Security needs to be carefully evaluated and planned out alongside your overall retirement income strategy.
How the Math Works
Your Social Security benefit amount varies depending on when you apply. The earliest you can claim retirement benefits is at age 62, and the latest you can claim is at 70. There's no benefit to waiting past 70—once you hit 70, the credits stop accruing.
Full Retirement Age — Simple in 2026
When the original edition of this book was published in 2019, FRA was a moving target. For most readers of this book in 2026, that complexity is gone:
Anyone born in 1960 or later has a Full Retirement Age of 67
That covers virtually every Big Three autoworker currently approaching retirement.
What That Means for Your Benefit
If your Full Retirement Age is 67 and you claim early, here's roughly how your benefit changes:
| Age You Claim | Benefit as % of FRA Amount |
|---|---|
| 62 | 70% |
| 63 | 75% |
| 64 | 80% |
| 65 | 86.7% |
| 66 | 93.3% |
| 67 (FRA) | 100% |
| 68 | 108% |
| 69 | 116% |
| 70 | 124% |
A Big Three retiree born in 1964—turning 62 in 2026—would receive 70% of their full benefit by claiming at 62, and 124% by waiting until 70. The difference between claiming at 62 and 70 is roughly a 77% increase in the monthly check.
The Case for Claiming Early
Peace of Mind
Knowing that Social Security and your pension cover the bills provides comfort and security.
Enjoying Prime Years
You want the money now, while you're healthy and active, even if it means fewer dollars later.
Don't Trust Waiting
You'd rather start collecting what you've paid in and invest it yourself.
Health Considerations
If you have reason to believe your life expectancy is shorter than average, claiming earlier locks in more lifetime payouts.
The Case for Deferring
Maximizing Survivor Benefits
When one spouse passes, the surviving spouse keeps the higher of the two benefits. If the higher-earning spouse delayed to 70, their surviving spouse continues to receive that delayed-credit-boosted check for life.
Longevity Protection
If you or your spouse live into your 90s, you are way ahead by deferring—every additional year you live past about 80 is "into the money" for delayed benefits.
Tax Planning Opportunities
This is the part most retirees miss. The years between retirement and your Social Security start date are some of the most valuable tax-planning years of your entire life.
The Hidden Tax Planning Goldmine
Imagine this scenario: you've retired and taken the lump sum, and since you're not yet collecting Social Security, your taxable income for the upcoming year is near zero. That's a goldmine for tax planning.
Withdraw at Low Brackets
Take IRA money at the lowest tax brackets (or even at the 0% capital gains rate)
Strategic Roth Conversions
Lock in today's tax brackets on money that would otherwise be taxed at much higher rates later
For a Big Three retiree who took the lump sum, has $1.5–2.5 million in pre-tax retirement assets, and has 5–8 years between retirement and FRA, the value of the deferred Roth conversion window alone can run into the hundreds of thousands of dollars. The Social Security delayed credit is icing on the cake.
A Hidden Bonus: Inflation Protection
Social Security is one of the few sources of retirement income that includes a built-in cost-of-living adjustment (COLA). Most Big Three pensions do not. Each year, the SSA adjusts benefits based on the Consumer Price Index.
Recent COLA Increases
2022
5.9%
2023
8.7%
Largest in 40+ years!
2024
3.2%
2025
2.5%
The 2023 COLA permanently raised the base from which all future COLAs compound. A COLA-adjusted income stream is structurally more valuable than the same dollar amount from a pension that doesn't adjust.
What About Trust Fund Solvency?
You've probably seen the headlines: "Social Security going broke." Some are accurate. Most are misleading. Let's lay out what's actually true.
Trust Fund Facts vs. Fiction
What People Fear
"Social Security will disappear and I'll get nothing."
What's Actually True
If Congress takes no action, benefits would be reduced to ~77-80% of scheduled amounts—not zero.
Trust fund depletion projected: 2033-2035
This means reserves are depleted, not that payments stop. Ongoing payroll taxes would still fund roughly 77-80% of benefits.
The bottom line:don't claim Social Security at 62 because you're afraid it won't be there at 70. That's not how the math actually plays out. Make your claiming decision based on your specific circumstances, not on cable news anxiety.
A Major Recent Change: The Social Security Fairness Act
Signed into Law: January 5, 2025
Retroactive to benefits payable in January 2024
For most Big Three autoworkers, this law doesn't directly affect your own benefit. But it may significantly affect your spouse's benefit if they worked in certain public sector jobs.
What It Eliminated:
Windfall Elimination Provision (WEP)
Previously reduced benefits for those with pensions from jobs not covered by Social Security
Government Pension Offset (GPO)
Previously reduced spousal/survivor benefits—often by 2/3 of the public pension amount
Who This May Affect:
Michigan teachers (in certain districts), federal employees under CSRS, certain municipal workers, retired police officers, firefighters, and others. If your spouse falls into one of these categories, their full Social Security benefits should now be payable.
Pulling It All Together
Pensions and Social Security provide guaranteed income streams that last as long as you do. If you opted not to take a monthly pension (electing the lump sum instead), Social Security may be your only automatically guaranteed monthly source of income—which is why many retirees who choose the lump sum look at fixed annuities to supplement that foundation.
Questions to Consider for Your Decision:
How is your health? Your spouse's health?
If you elected the pension, what is the survivor rate built into it?
If you took the lump sum, are you planning Roth conversions?
Can you live off other assets while letting Social Security defer?
What's your spouse's earnings record?
Could the Social Security Fairness Act apply to your household?
There is no one-size-fits-all Social Security strategy. It is a completely personal decision that varies from one client to the next—and it's worth getting right.
Social Security has the potential to pay out well over $1 million in cumulative benefits over a married couple's joint lifetime. This isn't a decision you want to take lightly.
When we build a plan, we plan for our clients to live to age 100. Conservative? Sure. But for the small number of clients who actually do, we don't want them running out of money at 95.