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This calculator computes the break-even point and the cumulative benefits for an individual taking his own Social Security retirement benefits beginning at age 62 versus beginning at his or her full retirement age (FRA). It is an estimate only, and should not be the only consideration when deciding when to begin social security benefits.
Factors can affect the decision to receive Social Security benefits, including health, personal financial considerations, and employment status. One method of assessing the financial advantage is to calculate the break-even age.
Taxpayers planning for their retirement should be aware that retirement benefits depend on age at retirement. If a taxpayer begins receiving benefits before full retirement age, the taxpayer will receive a reduced benefit. A taxpayer can choose to retire as early as age 62. Starting to receive benefits after full retirement age may result in larger benefits.
Calculator tab
Percentage of Social Security benefits subject to income tax
Social Security Benefits Schedule tab
Example
An individual is attempting to determine at what age they would like to start receiving Social Security benefits because of recent health issues.
Field | Input |
---|---|
Date of birth | 03/05/1954 |
Federal income tax rate during retirement | 25.0% |
Percentage of Social Security benefits subject to income tax | 85.0% |
Inflation rate | 2% |
Monthly benefit | 1150 |
In this example, the break-even point for total Social Security received is identified by (actual):
- Years from age 62 to break-even point (14),
- Year of break-even point (2030), or
- Age at break-even (76).
Conclusion: If the individual lives past age 76, the individual would receive greater lifetime Social Security benefits by waiting until full retirement age to start receiving benefits.
Note: Break-even occurs at the age when the total Social Security income from two options is the same.
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