When should you take Social Security? Most people think this is a math problem. They look at 62 and 67 and 70.

They run the number, see the break-even point, and then choose based upon that analysis.

But as a certified financial planner who's worked with hundreds of actual retirees, I'm here to tell you it is not a math problem.

It's a risk decision because every single decision you make is protecting you from one type of a risk while potentially introducing another.

And if you understand that, I mean really understand that, you're in a far better decision to make the decision that works for you as opposed to simply going with the break-even analysis.

So in today's video, I'm going to walk you through number one, how Social Security is calculated, because it's important to understand this, to understand the impact the different decisions have, what happens at age 62, 67, and 70.

And then most importantly, what risk are you protecting against based upon what age you collect at and what risk are you now exposing yourself to if you collect at that time.

So to understand the risks, we need to first

understand the foundation of how is Social Security actually calculated? Well, Social Security takes a look

at your 35 highest years of inflation adjusted earnings. So every year that you paid into Social

Security, Social Security is going to take a look at those earnings, adjust them for inflation,

and use them to say, here's your 35 highest years of earnings, and we're going to use this to calculate

what's called your primary insurance amount, or the amount that you are eligible for at your

primary insurance age, which for most of you watching if you're not already collecting, is age 67.

So if you work for 35 years and you had strong earnings, great. If you didn't work for 35

years, then any year that you did not work, Social Security is simply going to include zero

as the number for that year, and that gets used as part of the calculation. Now, here's where it gets

interesting. All that calculation is done to calculate your benefit at age 67, which is your primary

insurance amount.

If you collect as early as 62, which is the earliest you can collect, you will receive 70%

of what you would have received at age 67.

Now, on the flip side, if you delay collecting your benefit after the age of 67, and you

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