Episode Description

If you’re trying to decide when to start Social Security, here’s the short answer Tom Dupree and Mike Johnson give on this episode of The Financial Hour: there is no single right age. The right age for you depends on your health, your marital status, your other assets, and how much of your monthly income Social Security actually needs to cover. On this episode of The Tom Dupree Show, Tom Dupree and Mike Johnson of Dupree Financial Group walk through a real Social Security claiming-age framework, the breakeven math, the spousal and survivor considerations, and how a dividend-and-growth income portfolio fits around whatever you decide, plus a second, closely related conversation about the “forgotten investor”: people in their 40s and 50s whose portfolios have grown large enough that ordinary market swings now move real money, not just numbers on a screen.

What factors should go into your Social Security claiming decision?

Mike Johnson lays out roughly seven variables that belong in the decision, starting with whether you’re still working. At full retirement age (67 for most people claiming today), you can work and collect Social Security with no reduction in benefits. Claim earlier than that, and you run into the Social Security earnings test, which temporarily withholds part of your benefit once your income crosses an annual limit — that withheld money isn’t lost, it’s repaid later as a higher monthly check once you reach full retirement age. Life expectancy matters too, even though, as Mike puts it, it’s a guess based on family history at best. And if you’re married, the earnings history of each spouse matters a great deal, because of how survivor benefits work.

“We are not in the Social Security business, we are in the other assets business.”  Tom Dupree

How does the Social Security breakeven analysis work?

Mike Johnson walks through the most basic version of the math: compare what you’d collect starting at age 62 against what you’d collect by waiting until 67 or 70, then calculate how many years it takes the higher, later benefit to “catch up” in total dollars collected. In the show’s example, $2,500 a month at 62 versus $3,400 a month at 67, the breakeven point lands around nine years, meaning someone who waits until 67 typically comes out ahead in total lifetime benefits somewhere around age 76 to 78. Delaying all the way to 70 pushes the benefit even higher: the Social Security Administration’s delayed retirement credit schedule adds roughly two-thirds of one percent to your benefit for every month you wait past full retirement age, which works out to about 8% a year through age 70. The trade-off, as Tom and Mike are direct about, is that every year you wait is a year of Social Security income you didn’t collect, so the math only helps if you can comfortably cover your cash-flow needs from other sources in the meantime.

If your other assets can’t comfortably bridge that gap, claiming earlier at 62 can be the right call even though the monthly check is smaller — because a smaller check you can count on now may matter more than a larger one you’re betting will still be there when you’re 70. If you have income sources that can cover your needs without it, delaying can make sense, but that’s a bet that Social Security’s rules won’t change materially by the time you start drawing on it. There’s no universal answer; it comes down to your specific cash-flow picture, which is exactly the kind of thing Dupree Financial Group works through one-on-one with clients as part of a Personalized Portfolio Analysis.

Why does Social Security get more complicated for married couples?

When one spouse has a meaningfully higher earnings history, there’s a strategic wrinkle worth understanding: if the higher earner passes away, the surviving spouse steps into that higher earner’s Social Security benefit instead of their own. That can make it worthwhile for the higher-earning spouse to delay claiming, since it locks in a larger survivor benefit down the road… but only if the couple’s other assets can cover the difference while they wait. As Tom and Mike explain it, this is a case-by-case calculation, not a rule of thumb, and it’s a good example of why Kentucky retirement planning conversations need to look at a household’s full financial picture rather than Social Security in isolation.

How should your investment portfolio work alongside Social Security?

Once the Social Security piece is on the table, the conversation turns to what has to carry the rest of the load: the investment portfolio. Tom Dupree’s approach centers on cash flow you can see… dividend-paying stocks and bonds… rather than paper gains you’re hoping to sell into at the right moment. “There isn’t an easy way to build an income portfolio only,” Tom explains. “It has to have growth components in it… you have to be flexible in where you’re investing and how you’re investing.” That means accepting that valuation drives the decision: when dividend-paying stocks get expensive, their yields shrink, and a disciplined manager has to be willing to look elsewhere for companies that are out of favor, less expensive, and often carrying a higher yield as a result. All investing involves risk, including the possible loss of principal, and dividend income isn’t fixed or promised…a company can reduce or suspend a dividend. That’s exactly why Dupree Financial Group’s in-house research focuses on the durability of a company’s cash flow, not just its current yield.

Who is the “forgotten investor,” and why does dollar-cost averaging stop feeling like enough?

The second half of the conversation tackles a question Tom calls one of the best he’s read in a while, from a 44-year-old reader who’d been dollar-cost averaging for two decades and was unsettled by how large the dollar swings in his account had become…even though, percentage-wise, nothing unusual was happening. Tom’s read on it: “This is the forgotten investor right now, 40 to 50, because a lot of them have been putting back for 20 years. In this market run-up, they’re looking at dollars now that if you had a 20, 30% drop in the market, they’re gonna feel it… in real dollar terms.” Early in your investing life, a market drop barely registers because your ongoing contributions are large relative to your balance. Twenty years in, the balance has grown so much larger than any single year’s contribution that dollar-cost averaging alone can’t smooth out a real correction anymore…which is exactly the point in a plan where more deliberate, tactical decisions (raising some cash, addressing debt, revisiting allocation) start to matter more than muscle-memory saving.

Tom recalls working with a client during the 2008–2009 financial crisis whose account value swung by six figures in a matter of months… a stretch, he says, where “there were no good answers,” and the discipline that mattered most was treating the downturn as an opportunity to buy rather than a reason to sell. That’s an illustrative example from Tom’s decades in the business, not a specific return or outcome any client should expect to repeat; markets and individual circumstances differ every time.

What should you actually do differently once you reach this stage?

Tom and Mike’s practical answer has a few concrete pieces:

• Track down and consolidate “orphaned” 401(k) accounts left behind at old employers, so the whole portfolio can actually pull in the same direction.
• If you change jobs or your income drops in a given year, consider whether that’s a good window for a Roth conversion… a decision that has real tax consequences and is worth reviewing with a tax advisor before acting.
• Revisit your plan on a fixed schedule, not just when the market gets scary. Dupree Financial Group meets with clients roughly every six months specifically because life circumstances change more often than people expect, and a plan built two years ago may not fit today.
• Decide what your accumulated number actually needs to accomplish — income to live on, flexibility to pursue a second act, or something else… before backing into an investment approach built around that goal.