The Clark Howard Podcast

Episode: What Early Tax Filers Need To Know / When To Take Social Security

Date: January 7, 2026
Host: Clark Howard

Episode Overview

This episode of The Clark Howard Podcast focuses on two major financial topics for the new year: critical updates for early tax filers (especially around the Free File vs. Direct File confusion), and Clark’s always-controversial advice on the best age to claim Social Security. As always, Clark and Team Clark answer a range of listener questions touching on mortgages, real estate, credit card management, and HSAs, infusing each with practical, no-nonsense consumer wisdom.

Key Discussion Points & Insights

1. Early Tax Filing: What You Need to Know

(Starts at 00:50)

• Direct File vs Free File:
  • There’s confusion this year around free tax filing. Direct File (a government pilot) was discontinued, but the longstanding IRS Free File program still allows about 65–70% of Americans to file federal returns for free.
  • Each participating private company sets its own eligibility limits for Free File, which may differ from the federal guidelines.
  • Some offer free state filing; others don’t. You need to “play the match game” to find a provider that fits your needs.
  • Clark’s key reminder: “Before you go pay for tax software, you may be income eligible for free filing, Free prep, free filing.” (04:46)
  • For more information, visit IRS Free File.

2. Listener Question Roundup

Should I Pay Off a Low-Rate Mortgage?

(05:20–07:50)

• Joe from Texas: Debates paying off a 3% mortgage vs. investing the funds.
• Clark’s take: Psychologically, being debt-free feels great, especially for strong savers. If your cash is only earning about 3% in savings, it’s a “coin toss.”
  • Quote: “From a practical dollars and cents, you don’t want to give up. That 3% mortgage gives you more flexibility…But it sounds like you don’t need the flexibility.” (05:56)
  • Rates on savings are dropping to the 3% range, so the advantage is now less stark than in recent years.

Keeping vs. Selling Rental Property

(07:50–11:31)

• Charlie from Texas: Has two rental homes with low-rate mortgages but is tired of being a landlord.
• Clark’s advice: Treat rental properties as a business—if you dislike it, it’s okay to exit, even if tax advantages are better than what you’d get on savings.
  • Local and hyperlocal real estate conditions matter. Sometimes, market conditions may force you to hang on longer than you want.
  • Quote: “Being a landlord is not for the faint of heart. Some people just love it, others… it’s like, wow, this could happen, that could happen. Sounds to me like being a landlord is a no fun zone for you.” (09:08)

What Mail Should You Shred?

(11:31–13:07)

• Jenny from Texas: Wonders about shredding sensitive mail and credit offers with two small kids at home.
• Clark’s rule: Always shred credit offers unless your credit is frozen—then you can just toss them.
  • Credit freeze: Highly recommended. Takes about 15 minutes, gives crucial protection.
  • For more, visit clark.com/credit-freeze.
  • Quote: “If your credit’s frozen, you don’t need to shred those solicitations for credit.” (13:07)

3. When to Take Social Security

(13:15–19:42)

• Clark doubles down on his advice: Wait until age 70 to claim Social Security unless circumstances (poor health, financial hardship, forced early retirement) demand otherwise.

  • Only 1 in 10 Americans wait until 70, but the monthly check at 70 is 77% higher than at 62.
  • The break-even point for waiting is about age 83, but the odds of living into your 80s or 90s are significant, especially for women.
    • Data (from American Academy of Actuaries & Barron’s):
      • 33% of 65-year-old men will live to 90; almost half of women will make it.
  • Regret often comes later. Few regret taking benefits early while they’re young, but many wish they’d waited once they’re older.
  • Quote: “Delaying Social Security is about protecting yourself from, against living a really long time. So you got a third of men are going to make it to 90. Nearly half of women going to live to 90. So it’s longevity insurance if you wait.” (17:00)

• Exceptions:

  • Poor health? Take it earlier.
  • Forced out of the workforce and need the money? No guilt—take it.

4. More Listener Questions & Answers

Saving “Too Much” in an HSA?

(19:42–21:30)

• Tyler in Missouri: Maxing out HSA, wonders if that’s too much with $70,000 saved.
• Clark’s advice: Keep maxing it. Most medical costs come later in life. If you end up fantastically healthy, future rule changes may make unused funds even more advantageous.
  • Quote: “Building up the HSA as a tax-free war chest is phenomenal.” (20:08)

Credit Card Limit Reductions & Credit Bureau Visibility

(21:30–24:20)

• Marie in Oregon: Receives notice from her credit card issuer about a potential limit cut due to low usage.
• Clark’s insight: This is a widespread “panic” move by big banks. Low utilization (which is good for your score) now ironically triggers limit reductions as issuers worry about mass defaults.
  • Contact issuers and ask if more frequent use will keep your limit. Only close or use cards more if this matters to you.
  • Quote: “They’re saying, okay, so we’re going to just cut your limit to where it’s almost nothing. And so this is a panic from the big credit card issuers.” (22:29)

Are Rent/Utility Reporting Services Worth It?

(24:20–24:34)

• Susie in Hawaii: Asks about Built and Bloom Plus credit reporting programs to boost her score.
• Clark’s stance:
  • These extended scoring models exist and may help, but most lenders still use traditional models. They’re not “prime time” yet, but could be soon.
  • Quote: “It is true that there are these extended scoring models…but as far as how it’s working overall, it’s still the very conventional things on what credit you have, how you’re paying…” (24:34)

Notable Quotes & Memorable Moments

• On waiting for Social Security:
  • “Person waits till 70, their monthly check is 77% higher. 77%. And remember, for the rest of your life it’s so much higher.” (16:15)
• On landlords:
  • “Being a landlord is not for the faint of heart. Some people just love it, others sound like you. It’s like, wow, this could happen, that could happen. I got this expense. What happens if we got a big maintenance problem? What happens if we got a nightmare tenant?” (09:08)
• On shredding mail:
  • “If your credit’s frozen, you don’t need to shred those solicitations for credit.” (13:07)
• On HSA saving:
  • “Building up the HSA as a tax free war chest is phenomenal.” (20:08)

Timestamps for Major Segments

• 00:50 – Introduction: Tax-filing confusion, Free File vs. Direct File explained
• 05:20 – Paying off a low-rate mortgage (Joe in Texas)
• 07:50 – Rental properties and landlord fatigue (Charlie in Texas)
• 11:31 – What mail should you shred? (Jenny in Texas)
• 13:15 – When and why to take Social Security (Clark’s longevity insurance approach)
• 19:42 – HSA over-saving question (Tyler in Missouri)
• 21:30 – Credit limit reduction worries (Marie in Oregon)
• 24:20 – Rent and utility reporting for credit score (Susie in Hawaii)

Clark’s Closing Message

Clark reminds listeners to empower themselves with knowledge—use free resources like Clark.com and ClarkDeals.com to save more, spend less, and avoid rip-offs.

This episode delivers actionable, timely financial insights for early tax season, smart retirement planning, and everyday money management questions in Clark Howard’s approachable, factual style. Whether you’re looking to file your taxes for free, make a mortgage payoff decision, debate tapping Social Security, or just protect your identity, this episode gives you the tools to make informed choices.