Question about opensocialsecurity calculation

[disneysteve]

I just used opensocialsecurity to run our numbers for the first time. It only asks for both of our Primary Insurance Amounts at Full Retirement Age.

Does anything else about our financial picture and portfolio and income and spending needs weigh into this or is it really as simple as that calculation to determine the best strategy?

According to their calculator, my wife should claim next January when she will be 62 and 1 month and I should wait until I'm 70. I was a little surprised by that. Having her start collecting in under a year wasn't on my radar. When our CFP ran our numbers 3 years ago, he had her claiming at FRA and me at 70 but I honestly don't recall why. I'll have to ask him.

If it is best for her to collect in 01/2026, that definitely alters our numbers going forward. She'd be getting about 15K/year of income I haven't been counting on. That's a good chunk of change to suddenly have flowing in.

 

[audreyh1]

It’s only talking about SS.

Make sure you choose the life expectancy table that matches your health such as non-smoker and currently in good health or not. The default life expectancy is probably not a good match for many.

And then you can do comparison against other starting dates and see the lifetime difference. It may not be much. The tool lets you set up comparisons.

Once you’ve figured out the numbers associated with those options then take a look at Roth conversions or other things that impact taxes and might make it worth delaying.

 

[flyoverstate]

My spouse recently was rescued from WEP/GPO, so we have been running new numbers in the calculator. They paid just enough into SS over their career to make the spousal benefit insignificant, they would collect on their own record. opensocialsecurity tells us to have them take SS immediately, and have me, the higher earner, wait until 70. But we are getting a very healthy ACA subsidy that would be greatly reduced by my spouse taking SS, so we are holding off. The amount they would get from SS would be almost completely offset by the loss in subsidy when you consider the taxes that would be paid on the SS income.

We are on hold until we find out what will change with the ACA next year. Next year, we also plan to start Roth rollovers, so that comes into play as well.

opensocialsecurity *only* sees the Social Security picture, nothing else. Many financial advisors have software that allows the entire picture to be input, such software can optimize not only SS, but 401K/IRA, pensions, and other aspects to get a total "best strategy".

 

[disneysteve]

we are getting a very healthy ACA subsidy that would be greatly reduced by my spouse taking SS, so we are holding off. The amount they would get from SS would be almost completely offset by the loss in subsidy when you consider the taxes that would be paid on the SS income.

We are on hold until we find out what will change with the ACA next year. Next year, we also plan to start Roth rollovers, so that comes into play as well.

opensocialsecurity *only* sees the Social Security picture, nothing else. Many financial advisors have software that allows the entire picture to be input, such software can optimize not only SS, but 401K/IRA, pensions, and other aspects to get a total "best strategy".

That all makes a lot of sense. Thanks. We also get a nice ACA subsidy which would be impacted by claiming early.

And I'm quite sure our CFP used software that does as you said and looks at the big picture while this calculator doesn't.

 

[audreyh1]

In addition to choosing one of the “we are more healthy” tables, we compared the recommended starting times to what was more convenient tax/IRMAA timing wise. At most they had recommended DH start at 68 1/2 and I wait until 70.

When I compared lifetime earnings of their recommendation to us both starting at 70, the difference was less than 1%, so I decided it was a wash.

So you can explore when your ACA subsidy would no longer apply (both on Medicare) and compare.

 

[Cobra9777]

I'm 63, DW 64. Our baseline plan has always been: me at 70, DW at FRA (67). This was consistent with OSS a couple years ago. I re-checked yesterday and it said: me 70, DW now (Jan 2025). I wonder if there's been some change in the tool or actuarial tables?

Anyway, I ran a few alternative scenarios on life expectancy. The answer was still: me 70, DW now, or a few months later this year. To get it to align with our baseline plan, I had to extend my life expectancy quite a bit. In any case, the differences were fairly minor... typically 1-2%. But always negative for any further delay.

We're doing large Roth conversions (top of 22%). I've already reduced it once to come in just under the 1st IRMAA threshold. Don't want to do it again unless there's a compelling case. (In retrospect, I'm not even sure IRMAA was all that compelling.) Kicker is: I've got a conversion target I'm trying to hit before the TCJA 22% rate reverts to 25%. I'm not an enthusiastic converter at 25%.

Therein lies the mess from so much uncertainty in our tax code. If I knew for sure that 22% would live on, I'd be driving DW down to the SS office right now. Instead I'm explaining my delay/rationale on a discussion forum.

 

[Focus]

It’s only talking about SS.

Make sure you choose the life expectancy table that matches your health such as non-smoker and currently in good health or not. The default life expectancy is probably not a good match for many.

And then you can do comparison against other starting dates and see the lifetime difference. It may not be much. The tool lets you set up comparisons.

Once you’ve figured out the numbers associated with those options then take a look at Roth conversions or other things that impact taxes and might make it worth delaying.

^This.

Also, scroll all the way to the bottom of the calculator page to look at the "Test an alternative claiming strategy" chart. If you hover over different dates you'll see just how small the difference is between a range of them. This was an eye-opener for me. I always assumed I'd be taking SS at 70, but now an earlier date looks more likely, unless I decide to do some Roth conversions.

 

[audreyh1]

RIght, that test an alternative claiming strategy is where you can do comparisons against the recommendation and get an idea of the differences it would make.

 

[Exchme]

In addition to ACA premium credits, deferring SS leaves you low tax space for doing Roth Conversions while your SS benefit grows.

 

[SecondCor521]

I'm 63, DW 64. Our baseline plan has always been: me at 70, DW at FRA (67). This was consistent with OSS a couple years ago. I re-checked yesterday and it said: me 70, DW now (Jan 2025). I wonder if there's been some change in the tool or actuarial tables?

The recommended claiming strategy seems to be fairly sensitive to interest rates. The tool uses as one of its inputs the real interest rate on TIPS, which it pulls daily from some Treasury website somewhere. This change in input can and will change it's recommendation to you, even if you input all of "your" inputs the same.

You can see the rate it uses and optionally provide a different rate by checking the checkbox at the top of the tool and then looking for "discount rate" or something like that.

 

[FREE866]

RIght, that test an alternative claiming strategy is where you can do comparisons against the recommendation and get an idea of the differences it would make.

Never noticed that option. The difference in taking at 62 vs 70 in my case is really minuscule. Like ~ 5% which in the big picture seems statistically insignificant. I'm 58 now so don't have to decide, but seems like I really should take at 62. Or am I missing something? I've gone back and forth on this issue so many times its exhausting