Updated Social Security Tools

[Finance Dave]

I searched and investigated SS claiming strategy tools on this website, but some are no longer around (like the Blackrock tool) and others have started charging, etc. Thought it would be good to have an updated thread.

Wife is 62, I'm 58. Starting to think about when to file. We can afford to wait...our desire is to maximize NPV. Lots of complications, such as the fact that delaying may allow more years to do Roth conversions to drive down RMDs to minimize tax torpedo. Also, we are getting ACA subsidy, so need to watch our AGI until I'm 65.

Anyway, I've found the below four tools. Do any of you have experience with these or know of other tools? What thoughts/recommendations do you have? I want to be able to review scenarios and see what our best strategy is.

As a side note, my wife made about 70-80% of what I did most of our careers...so we don't have an obvious choice on strategy. I've already used the free tool below, but would like to see some other results too.

Thanks!

o https://www.ssanalyzer.com/site/index.php - Costs $300 and used by profssionals
o https://maximizemysocialsecurity.com/ - $40 per year
o Get more Social Security benefits with Social Security Solutions. - $50 if you want to compare scenarios…$20 without
o https://opensocialsecurity.com/ - Free online tool

 

[timo2]

I used 'maximize my social security' and the $40 was worth it. I paid for one year only, and it was the only site I found that adequately worked with the WEP and GPO issues. Given that, I would recommend that site. If it had the WEP and GPO correct, then I would expect the other information to be good also.

 

[pb4uski]

I think that opensocialsecurity.com is the best of the bunch, because it also takes mortality into account. It is important to understand how it works.

What is does is that it calculates and expected present value for every possible claiming strategy based on the assumptions that you provide (under Advanced Options). So not only the benefit, but also the probability that you are alive to receive the benefit.

The claiming strategy that results in the highest expected present value is the optimal claiming strategy. You can also compare that to alternative claiming strategies like both as early as possible, at 65, at FRA and at FRA for the lower earner/70 for the higher earner, etc.

Now all of that said, for us the results were not particularly sensitive. Table below compares the EPVs of various alternatives.

	No haircut	Haircut
Optimal solution	100.0%	100.0%
Both now	97.8%	98.9%
Both 65	99.0%	99.7%
Both at FRA	99.2%	99.2%
Me 70/DW FRA	98.7%	96.3%

We are the same age but I was the higher earner. My PIA is 333% of hers. Above is with 3.3% real rate of return and 2017 non-smoker preferred mortality.

 

[PatrickA5]

I used Maximize My Social Security ($40), Open Social Security (free), Quicken SS Analyzer ($79).

I liked Open Social Security the best.

Maximize my Social Security was good, but it really emphasized the longevity insurance aspect of delaying until 70. For example, it's default death dates are 100 for both spouses, which makes the difference between taking early and waiting until 70 HUGE. You can change it to a more realistic death age at which point it comes out closer to Open Social Security.

In my case, it had me taking early and DW taking at 70. I plan on taking mine soon! Can't wait! Unless something drastic happens, we'll delay DW until 70 for both longevity insurance and to maximize survivor benefits.

 

[CardsFan]

I have used Open Social Security, and like the ease of input. Make sure you use the advanced options for looking at different discount rates.

We don't have WEP or GPO issues, so simple is fine. With those, I would definitely pay a few bucks for a more complete analysis.

Bottom line remains (as always): You don't know when you or your spouse will pass. From PB4USKI's numbers (and I have run similar ones) we are talking about a statistical 2% variance, not much.

For us, DW started at 65, I will start in 18 months at FRA. From opensocialsecurity, that is within 1% of "optimum". I can live with that.

 

[Clone]

One thing that took me a while to grasp- With social security being actuarially neutral, then the results reflect your assumptions. If you assume you will die young, claim young. If you assume you will last a long time, then delay. The nuance comes in the small details like leaving more room for Roth conversions, having a larger benefit for the surviving spouse, things like that.

I think there are few wrong moves in when to claim social security, but I am also comfortable with my rationale for our plan on when to claim.

Our circumstances, which are (like many others) quite unique. DW claimed at 62, as this caused a savings on self employment taxes. I will claim at 70 (unless I change my mind...). This leaves room for more Roth conversions, and leaves a larger survivor benefit for DW, if she should survive me. I think that if one of us lives past (somewhere around) 83, then this will have been the optimal solution, for us. If neither of us makes it that far, we have plenty of money to live on until that day. If we pass early, the inheritance of our 401ks and IRAs will land on our heirs during their peak earning years. Thus, the headroom to Roth convert is a significant factor for us.

I like the opensocialsecurity tool, and have built numerous spreadsheets to try to model the outcomes for the different scenarios. The predictions are a function of your assumptions. And there are many things that we do not yet know that will impact the actual results.

 

[CardsFan]

One thing that took me a while to grasp- With social security being actuarially neutral, then the results reflect your assumptions. If you assume you will die young, claim young. If you assume you will last a long time, then delay. The nuance comes in the small details like leaving more room for Roth conversions, having a larger benefit for the surviving spouse, things like that.

I think there are few wrong moves in when to claim social security, but I am also comfortable with my rationale for our plan on when to claim.

Our circumstances, which are (like many others) quite unique. DW claimed at 62, as this caused a savings on self employment taxes. I will claim at 70 (unless I change my mind...). This leaves room for more Roth conversions, and leaves a larger survivor benefit for DW, if she should survive me. I think that if one of us lives past (somewhere around) 83, then this will have been the optimal solution, for us. If neither of us makes it that far, we have plenty of money to live on until that day. If we pass early, the inheritance of our 401ks and IRAs will land on our heirs during their peak earning years. Thus, the headroom to Roth convert is a significant factor for us.

I like the opensocialsecurity tool, and have built numerous spreadsheets to try to model the outcomes for the different scenarios. The predictions are a function of your assumptions. And there are many things that we do not yet know that will impact the actual results.

Well said, and right on the mark. Way too many moving parts to think anyone can optimize, so you do what best fits your circumstances at the time.

This should end all future threads asking when to take SS. Right? Maybe? oh, who am I kidding. we love to talk about it here.

 

[Perryinva]

^^^LOL X infinity ^^^

 

[racy]

Probably the calculators one really needs to calculate SS are the "When Will I Die" calculators. I've found these:
https://www.death-clock.org/
https://tinyurl.com/y866gb98
https://tinyurl.com/js9qke3

 

[Rianne]

Probably the calculators one really needs to calculate SS are the "When Will I Die" calculators. I've found these:
https://www.death-clock.org/
https://tinyurl.com/y866gb98
https://tinyurl.com/js9qke3

Those are pretty funny. They don't take into account health issues. I'd like an actuarial that adds a specific health issue along with the rest of the info.

 

[pb4uski]

Or this: https://www.longevityillustrator.org/

 

[Rianne]

I found this calculator on Medscape. It gives you prognostic tools regarding any health issue. Very informative and made my day!
Edit: You have to know your specific health condition and specific test results. I had to log into my patient portal and get exact blood/test results. This must be what docs use to estimate lifespan and longevity.





https://reference.medscape.com/guide/medical-calculators

 

[Finance Dave]

Thanks everyone!

I've run openSS like pbuski did and ours come out quite different if we were to decide to take early versus later....almost 20% range!

For us the recommendation was for her to take at 69 years 2 months, and for me to take at 70. That seems appropriate...as we don't need the money in the short term so we can wait. I consider SS an annuity with COLA...and it's the only one we'll likely have. I will have a pension (it was a defined contribution from MegaCorp but one option upon payout is to convert it to an annuity...but it is not COLA adjusted) also. We are very blessed to be able to make choices...I know a lot of people that MUST take SS as soon as they can to live on.

Over our careers, I'd say my income was about 30% higher than hers...but we both made good money.

My brother is in a different situation...he was VERY highly paid during his career, but his wife worked only a few years at part time minimum wage jobs. I've passed along the tool to him to play with.

 

[pb4uski]

Thanks everyone!

I've run openSS like pbuski did and ours come out quite different if we were to decide to take early versus later....almost 20% range! ....

I wonder if the reasons why your results varied so much compared to mine relates to the discount rate. Mike's default is a 30-year TIPS rate... currently -0.15%.

I think a more appropriate rate is the real rate of return expected from my portfolio and at the time used 3.3%... 5% nominal less 2.7% for inflation. I think it will make a big difference.

 

[CardsFan]

I wonder if the reasons why your results varied so much compared to mine relates to the discount rate. Mike's default is a 30-year TIPS rate... currently -0.15%.

I think a more appropriate rate is the real rate of return expected from my portfolio and at the time used 3.3%... 5% nominal less 2.7% for inflation. I think it will make a big difference.

+1.

I ran several scenarios with different discount rates. It can have a huge impact on the results

 

[Time2]

One thing that took me a while to grasp- With social security being actuarially neutral, then the results reflect your assumptions. If you assume you will die young, claim young. If you assume you will last a long time, then delay. The nuance comes in the small details like leaving more room for Roth conversions, having a larger benefit for the surviving spouse, things like that.

You listed the two reasons I expect to delay my SS until 70.
Roth Conversions and larger benefit for surviving spouse.
Not sure when to have my wife claim, but we have plenty to Roth convert,
so maybe 70 also.

I stupidly did not do any conversions while the market was down.
Let's hope I don't get another chance to convert at a lower price!

 

[bizlady]

Open social security is interesting as it suggests we suspend DH SS at FRA and then restart 2 years later. He started at age 62. Did not know this was an option and would increase his benefit and allow us to spend down some taxable accounts before RMD kicks in.

 

[Time2]

Open social security is interesting as it suggests we suspend DH SS at FRA and then restart 2 years later. He started at age 62. Did not know this was an option and would increase his benefit and allow us to spend down some taxable accounts before RMD kicks in.

I would verify that this is still an option, something about suspending was discontinued a few years ago.
Someone will probably chime in with the info.

 

[Mike Piper]

I would verify that this is still an option, something about suspending was discontinued a few years ago.
Someone will probably chime in with the info.

It is still an option.


What changed regarding suspension is that nobody else* is allowed to receive a benefit (e.g., spousal or child benefit) on the work record of the person who is suspended, during the period of suspension.


But it is still definitely an option to suspend a benefit at FRA in order to receive delayed retirement credits.


https://secure.ssa.gov/apps10/poms.nsf/lnx/0202409100


*Ex-spouses are an exception. An ex-spouse can still get benefits on your work record while your benefit is suspended.

 

[CindyBlue]

I'm still trying to find a Soc Sec calculator that will tell what I'll get at FRA if I don't work the last year before FRA (and thus have no income to contribute to my Soc Sec earnings.) Every calculator I've tried seems to assume that I'll be working right up until FRA. Anyone have one?

 

[bizlady]

The risk in suspending might be if benefits get cut during the suspension time....

 

[pb4uski]

I'm still trying to find a Soc Sec calculator that will tell what I'll get at FRA if I don't work the last year before FRA (and thus have no income to contribute to my Soc Sec earnings.) Every calculator I've tried seems to assume that I'll be working right up until FRA. Anyone have one?

There is one on the SSA website but having one zero year isn't going to make enough of a difference to even bother with.

 

[bizlady]

I'm still trying to find a Soc Sec calculator that will tell what I'll get at FRA if I don't work the last year before FRA (and thus have no income to contribute to my Soc Sec earnings.) Every calculator I've tried seems to assume that I'll be working right up until FRA. Anyone have one?

This will do it, when you get through it select the option to add another estimate-- generally one or two more years will not change your benefit that much

https://secure.ssa.gov/acu/ACU_KBA/main.jsp?URL=/apps8z/ARPI/main.jsp?locale=en&LVL=4

 

[camfused]

IMHO, these tools are not necessary. If you *need* SS, in order to enable you to retire at a certain age, then (wait as long as you can, and) take it early. If not, then delay as long as possible.

In my eyes, the whole purpose of planning is to figure out how to handle the worse case scenario --- you live to a very old age, such as 90 - 95, or even 100. In that scenario, taking SS as late as possible is always the best solution. No one should plan on living to a younger age than something like that. Using the actuarial tables is a gamble you could lose on.

My planning spreadsheet always seeks to maximize the assets at 90 (sometimes I try 95), and any way I try to work it, taking SS at 70 for DW and I always wins. I do this because who knows what LTC, medical, or similar expenses will be needed at such an age. Running out of money is not acceptable!

But of course, I could be wrong.

 

[PatrickA5]

IMHO, these tools are not necessary. If you *need* SS, in order to enable you to retire at a certain age, then (wait as long as you can, and) take it early. If not, then delay as long as possible.

In my eyes, the whole purpose of planning is to figure out how to handle the worse case scenario --- you live to a very old age, such as 90 - 95, or even 100. In that scenario, taking SS as late as possible is always the best solution. No one should plan on living to a younger age than something like that. Using the actuarial tables is a gamble you could lose on.

My planning spreadsheet always seeks to maximize the assets at 90 (sometimes I try 95), and any way I try to work it, taking SS at 70 for DW and I always wins. I do this because who knows what LTC, medical, or similar expenses will be needed at such an age. Running out of money is not acceptable!

But of course, I could be wrong.

Obviously, if you live to 95 - 100, you will end up with more money if you delay to 70. Longevity insurance (for some people) is very important. For others, not so much.

Your analysis doesn't incorporate any health related issues.