By Jim Miller
Deciding when to begin collecting your Social Security benefits could be one of the most important retirement decisions you’ll make. The difference between a good decision and a poor one could cost you tens of thousands of dollars over your retirement, so doing your homework and weighing your options now is a wise move.
What to Consider
As you may already know, you can claim Social Security any time between the ages of 62 and 70, but each year you wait increases your benefit by 5 to 8 percent. But there are other factors you need to take into account to help you make a good decision, like your health and family longevity, whether you plan to work in retirement, along with spousal and survivor benefits.
To help you weigh your claiming strategies, you need to know that Social Security Administration claims specialists are not trained or authorized to give you personal advice on when you should start drawing your benefits. They can only provide you information on how the system works under different circumstances. To get advice you’ll need to turn to other sources.
Your first step in getting Social Security claiming strategy advice is to go to SSA.gov/myaccount to get your personalized statement that estimates what your retirement benefits will be at age 62, full retirement age or when you turn 70. These estimates are based on your yearly earnings that are also listed on your report.
Once you get your estimates for both you and your wife, there are many online tools you can turn to that can compare your options so you can make an informed decision.
Some free sites that offer basic calculations include AARP’s Social Security Benefits Calculator (AARP.org/socialsecuritybenefits), the Consumer Financial Protection Bureau’s Planning for Retirement tool (ConsumerFinance.gov/retirement) and SSAnalyze that’s offered by United Capital (BedrockCapital.com/ssanalyze).
But if you want a more thorough analysis check out Maximize My Social Security (MaximizeMySocialSecurity.com) or Social Security Choices (SocialSecurityChoices.com), which both charge $40. These services, which are particularly helpful to married couples as well as divorced or widowed persons, will run scenarios based on your circumstances and show how different filing strategies affect the total payout over the same time frame.
If you want human help, there are specialized firms and financial advisers that can advise you too.
One such firm is Social Security Solutions (SocialSecuritySolutions.com, 866-762-7526). They offer several levels of web-based and personalized service (ranging from $20 to $500) including their $125 “Advised” plan that runs multiple calculations and comparisons, recommends a best course of action in a detailed report, and gives you a one-on-one session with a Social Security specialist over the phone to discuss the report and ask questions.
Or, you can get help through a financial planner. Look for someone who is a fee-only certified financial planner (CFP) that charges on an hourly basis and has experience in Social Security analysis. To find someone, use the National Association of Personal Financial Advisors online directory at NAPFA.org, or try the Garrett Planning Network (GarrettPlanningNetwork.com), which is a network of fee-only advisers that charge between $150 and $300 per hour.