Jason Fichtner of the Mercatus Center at George Mason University, a member of the HelloWallet academic advising team, says that a new AARP calculator can help you get more money in Social Security benefits by choosing the right time to claim them. The calculator takes in personal information like your marital status, annual income for you and your spouse, and whether or not you have worked for the government (a factor that can significantly decrease your benefits) and displays a graph of the range of monthly benefits you might receive by choosing to claim Social Security at various ages. You can also calculate what percent of your living expenses will be covered by Social Security based on what age you start receiving benefits.
Fichtner told Market Watch that he “applaud[s] AARP for providing the public with this useful online tool… and [for] emphasizing the positive financial benefits associated with delaying claiming past age 62 and even past the FRA [full retirement age].” He pointed out that there is a 6 percent reduction in benefits for each year you claim before the full retirement age (now 66), which is a significant difference that most people aren’t aware of. The difference between claiming at age 62, which is the earliest Social Security benefits can be accessed, and age 70 is a 76 percent higher monthly payment, says Fichtner.
Though the AARP tool provides a powerful visualization of how important it is to chose the right age to start receiving benefits, Fichtner also recommends reading through articles like this one on the Social Security Administration’s website before making a decision.
Give the tool a try, and let us know if you find it useful!