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Social Security Calculator

April 13th, 2017 at 05:30 am

Here's an interesting calculator that analyzes the best time for you to start collecting Social Security:

Here are my results:

Recommended Solution
Based on the data above, the following plan of action is recommended:
PatientSaver will file for her own benefit to start on 8/1/2029, the month after she turns 70 and receive 125.33% of her full retirement age benefit.
The optimal filing solution results in a net-present-value of $748,337

In contrast, if the client filed at 62 the net-present-value of their benefit would be $583,267

5 Responses to “Social Security Calculator”

  1. AnotherReader Says:

    Assumptions about lifespan and inflation can alter these numbers dramatically. What assumptions does this calculator make? Does it consider employment between age 62 and FRA?

    I took Social Security at 62 because if the net income is invested, the "break even" point changes significantly. I am also of the opinion that people already receiving the annuity will be less likely to have their payment cut when Congress decides to reduce benefits. My state does not tax Social Security (yet) and that makes a difference as well.

  2. Kiki Says:

    Mine is:

    Kiki will file for her own benefit to start on 8/1/2044, the month after she turns 70 and receive 124% of her full retirement age benefit. I have a windfall pension provision which will deduct about $400/month from my benefit.

    The optimal filing solution results in a net-present-value of $720,092.
    In contrast, if the client filed at 62 the net-present-value of their benefit would be $569,012.

    If I die in 2063 aged 88 years 5 months the payout would equal 1,528,175

  3. Dido Says:

    Yes, the recommendations will benefit a lot depending on your expected longevity. You can play with the page and cycle through, changing your longevity by one year at a time. The default has me living to 90; my parents both died in their 70s. If I put my longevity at 76, it recommends that I start drawing at 62, and then increases a year or so at a time until by an expected longevity of age 85, it recommends that I delay until 70.

    Also note that the amounts listed on your SSA benefit statements every year change, because they project that you will earn whatever your latest salary was input into the system every year for the rest of your working life. So in a low income year, you will see your projected benefits go down and in a high income year, they will go up.

    When to begin collecting depends also on whether you are working. If you delay until your full retirement age, you are ok, but if you are working part-time and collecting, you will see a decrease in benefits.

    Also be aware that until age 70 you can start, stop, and restart your benefit. Each year of stopping increases your benefit; each year you take it earlier decreases your benefit.

  4. PatientSaver Says:

    Yeah, so determining when to begin is basically a crapshoot. Age 90 does appear to be their default. Mom died at 81 and dad is still with us at 84, so i left it at 90, solidifying my desire to wait til full retirement age.

    I believe someone told me once that if you use SSA's customized payout formula you can factor in an erratic or lower income until retirement. I would always make sure that whatever earnings I had did not interfere with my SS payments or cause them to be reduced, as that just wouldn't make sense to me. Why start collecting SS if your earned income will cause SS payments to drop? One or the other, but not both, although event the small amount of earned income SS allows would give you over $1,000 a month, enough to make a difference.

    My plan is to collect at FRA, or 66 and 10 months, to boost monthly income but still start collecting when I can still hopefully enjoy the added money. I don't want to wait til I'm too decrepit to use it!

  5. Dido Says:

    Here's a good article on the wage reduction.=: http://www.nolo.com/legal-encyclopedia/will-i-get-penalized-working-while-collecting-social-security-retirement.html#. If you are collecting before FRA, there will be a wage reduction. Always good to wait until at least FRA to file as you get the most options and most benefit. I've never heard of a "customized payout formula."

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