Watching Your Wallet: Understanding Social Security Benefits
The Social Security Administration recently announced that benefits for nearly 75 million Americans will increase by 2.8% in 2026 — welcome news for retirees navigating rising living costs.
Social Security plays a crucial role in retirement income planning, yet many Americans don’t fully understand how or when to claim their benefits. To help shed light on this important topic, Portfolio Advisors Inc‘s Lead Financial Advisor, AJ Flores, CFP® joined ABC30’s Watching Your Wallet segment with Vanessa Vasconcelos to discuss how individuals can make informed decisions about their Social Security strategy.
What Is Social Security?
Social Security is a government-administered program designed to provide a fixed income for retirees, as well as for certain individuals with disabilities and survivors of deceased workers. Most people contribute to Social Security throughout their working years through payroll taxes.
“You pay into Social Security through payroll tax,” explained AJ Flores, Lead Financial Advisor at Portfolio Advisors Inc. “If you’ve ever checked your paystub, you’ll see a little section that says ‘Social Security.’ That’s your contribution toward your future benefit.”
When the time comes, those contributions convert into monthly income designed to help replace part of your earnings in retirement.
When Can You Claim Benefits?
Depending on your situation, you can start receiving Social Security benefits as early as age 62. However, your full retirement age (FRA) — the point at which you’re eligible for 100% of your benefit — is typically 67 for most individuals.
“You can make a case to delay Social Security in order to secure a higher monthly benefit for you,” Flores said. “Waiting guarantees a higher benefit, but it also delays when you can start enjoying that income.”
For every year you delay benefits beyond your FRA (up to age 70), your monthly payout increases by roughly 8% per year. The right claiming strategy depends on factors such as health status, life expectancy, retirement goals, and other income sources.
Addressing Concerns About Social Security’s Future
A common concern among retirees and younger workers alike is whether Social Security will continue to be fully funded. Flores provided clarity on what to expect.
“As of right now, Social Security is projected to be able to be funded 100% through at least 2033,” he explained. “After that point, assuming no changes are made, there may be some adjustments beyond 2033. Barring any action, Social Security will still be able to pay out at least 77% of everyone’s benefit just through payroll taxes collected from the workforce.”
While the program may face adjustments in the coming decades, it’s not disappearing. Policymakers are exploring solutions to strengthen the program’s long-term sustainability, and financial professionals like the team at Portfolio Advisors help clients plan with flexibility in mind.
Steps to Take Now
Regardless of your age or retirement timeline, there are proactive steps you can take today to better understand your Social Security benefits:
- Create an online account at SSA.gov to review your earnings history and ensure all past income has been correctly reported.
- Use the benefit estimator tool to project your expected benefit at different ages.
- Coordinate with your spouse if applicable — understanding how spousal and survivor benefits work can significantly affect your household’s long-term income.
- Include Social Security in your broader retirement plan. As Flores noted, “Knowing how you’re eligible, and how it fits into your bigger picture, is very important.”
Monitoring your account regularly helps ensure accuracy and allows you to make adjustments to your savings strategy if needed.
The Bottom Line
Social Security remains a critical component of most retirement income plans — but understanding when and how to claim it can make a substantial difference. Whether you’re years away from retirement or preparing to file soon, informed planning can help maximize your benefits and provide long-term financial security.
At Portfolio Advisors Inc., we’re proud to collaborate with ABC30 and Vanessa Vasconcelos through the Watching Your Wallet segment to share educational insights that help Central Valley residents make confident financial decisions.
For personalized guidance on integrating Social Security into your retirement plan, visit our Knowledge Center or connect with our advisory team today.
