What’s Full Retirement Age
Full retirement age is when you’re eligible to receive full Social Security benefits. Your full retirement age depends on your birth year: For anyone born in 1960 or later, full retirement age is 67. For those born in 1955 through to the end of 1959 , full retirement age ranges between 66 and 2 months and 66 and 10 months. If you were born before 1955, you’ve already reached age 66 and full retirement age.
What If I Delay Taking My Benefits
If you retire sometime between your full retirement age and age 70, you typically earn a “delayed retirement” credit for your own benefits . For example, say you were born in 1960, and your full retirement age is 67. If you start your benefits at age 69, you would receive a credit of 8% per year multiplied by two . This means your benefit would be 16% higher than the amount you would have received at age 67.
Retirement Savings Longevity Calculator
Retirement planning is a tricky business. There are so many variables to consider, and it can be difficult to know where to start. One of the most important considerations is life expectancy. Obviously, the longer you expect to live, the more money you will need to cover your costs. However, predicting your life expectancy can be difficult, and even small changes can impact your retirement plans.
This Retirement Savings Longevity Calculator can help. It uses an annuity to distribute your retirement savings and provides a guaranteed paycheck for life, regardless of how long you live. As a result, it can give you a much more accurate estimation of how much money you will need in retirement. And that can make all the difference when it comes time to hang up your work boots for good.
Note: You can purchase an annuity with your 401, IRAs, retirement accounts, investments, and cash.
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Where Most Break Even Calculators For Social Security Break Down
For many years, the Social Security Administration had a break even calculator on their website for consumer use. They ultimately removed it over concerns that it was being used to make poor filing decisions.
Following the lead of the SSA, many of the other financial software companies also took down or stopped updating their Social Security break even calculators.
Today, its difficult to find a free calculator thats useful and easy to understand. There are a few still available but when Ive tested them, I find they have inadequacies that limit their effectiveness.
Ive found there are two main issues plaguing these calculators:
Lets look at each of these issues so youll understand why theyre problematic and how to correct it if you run your own break even analysis.
How A Social Security Break
Figuring out the right time to start taking Social Security benefits isnt always a straightforward process. A Social Security break-even calculator can help you get some perspective on the numbers so you know what you stand to gain or lose by taking benefits earlier versus later.
Social Security break-even calculators help you find the best age to start taking retirement benefits. They do this by comparing your cumulative Social Security retirement benefits paid at age 62, your full retirement age and at age 70 and estimating how long it would take the benefits paid at age 70 to break even with benefits paid to start at age 62.
Heres a simple calculation to give you an idea of how a Social Security break-even calculator works. Say that you have the option to begin receiving $1,200 a month in benefits at age 62. Youd receive $1,700 in benefits if you wait until full retirement age at 66. Or you could receive $2,200 a month in benefits by delaying them until age 70.
The break-even point represents when the cumulative benefits even out. So if you wait until age 70 to start taking benefits, it would take you until age 79 to break even with the benefit amount youd receive if you started taking them at age 62. If you were to start receiving benefits at age 66, it would take you until age 75 to break even with the benefits youd receive if you started them at 62.
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How To Calculate Your Social Security Break
Deciding when to take Social Security retirement benefits is important because it can directly affect your benefit amount. While you can technically start taking benefits as early as 62, youd receive them at a reduced amount. On the other hand, you could delay taking benefits up to age 70. Calculating your Social Security break-even age can help you decide when the best time is to begin taking benefits. You can do that using a Social Security break-even calculator. Additionally, it may be a good idea for you to consult with a financial advisor about when its best for your particular situation to begin receiving Social Security.
What If I Change My Mind
If you receive Social Security benefits at a reduced rate but then change your mind, you have the option of withdrawing your application within the first 12 months of receiving benefits and paying back to the government what you’ve already received . Then, you could restart benefits at a later date to take advantage of a higher payout. Be aware that you’re limited to one withdrawal per lifetime.
For example, let’s say you elected to receive early benefits at age 62 but then decided to go back to work at age 63. You could withdraw your Social Security application, pay back the years’ worth of benefits you received, go back to work, and then wait until your full retirement age to restart your benefit checks at a higher level.
Once you reach full retirement age, another option is to voluntarily stop benefits at any point before age 70 to receive delayed retirement credits . Benefits will automatically restart at age 70 at a higher amountâunless you choose to start taking benefits before then. Note that when you withdraw your application or stop your benefits after full retirement age, you must specify if your Medicare coverageâif you have itâshould be included in the withdrawal.
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The 10 Best Life Expectancy Calculators
Lifetime expectancy calculators use data to help assess how long you yourself are going to live. These calculators offer no guarantees of accuracy, but they might help you come up with a life expectancy that is perhaps more realistic for you.
Some of the best life expectancy calculators include:
Livingto100: This calculator is based on data from the New England Centenarian Study, the largest study in the world of people who live to 100. The Livingto100 calculator asks you almost 50 questions to determine how long you might live. The particularly nice thing about this detailed life expectancy calculator is that it gives you personalized feedback on each data point about why it is important to your longevity.
Blue Zones Vitality Compass: The Vitality Compass is the life expectancy calculator from Blue Zones. Blue Zones is a publisher dedicated to uncovering the best strategies for longevity based on places in the world where higher percentages of people enjoy longer lives.
Blueprint Income: The Blueprint Income life expectancy calculator has a great, easy to use interface and interesting outputs.
It was developed by Dean Foster, the William H. Lawrence Professor at the University of Pennsylvanias Wharton School of Business. This calculator uses a detailed statistical analysis of NIH-AARP data and is sometimes called the Wharton Life Expectancy Calculator.
How To Estimate Your Lifespan
So, how do you estimate your longevity? The usual process is to look first at the average life expectancy for your age, gender, and race. Then, adjust the average based on your health, family health history, and lifestyle.
There are many free life expectancy calculators online that walk through this analysis. As a rule, don’t provide any personally identifiable information to these programs. You’ll share information about yourself to get a life expectancy number, but the calculator doesn’t need your birthdate, mother’s maiden name, or Social Security number.
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What A Social Security Break
In a nutshell, a Social Security break-even calculatorcan tell you when the best age is to start taking Social security benefits, in terms of how much money you could expect to receive over time. Going back to the previous example, lets assume that you track your benefit amounts over a 10-year, 20-year and 30-year period. Heres how your total benefits received would look over each of those periods, for all three starting points.
Your cumulative benefits after 10 years:
- $144,000, starting at age 62
- $122,400, starting at age 66
- $52,800, starting at age 70
Your cumulative benefits after 20 years:
- $288,000, starting at age 62
- $326,400, starting at age 66
- $316,800, starting at age 70
Your cumulative benefits after 30 years:
- $432,000, starting at age 62
- $530,400, starting at age 66
- $580,800, starting at age 70
You can see that youd draw the most Social Security benefits in total if you wait until age 70 to start taking them, assuming you live to age 100. But that could be a big if when youre not in the best health.
What you have to keep in mind when using a Social Security break-even calculator is that the numbers are hypothetical. They dont take into things that could affect your ability to draw benefits or how far those benefits might go, such as:
Life Expectancy Calculator: Determine Your Longevity For Retirement
Shawn Plummer
CEO, The Annuity Expert
Are you interested in finding out how long you will live? With our Life Expectancy Calculator, you can determine your longevity. This tool is based on scientific data and considers your age, sex, and lifestyle habits. It is important to know your life expectancy, as it can help you make informed decisions about your health. Use our calculator to understand better how long you will live!
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Effect Of Delaying Retirement Benefits
1Represents Full Retirement Age based on DOB January 2, 1960
2PIA = The primary insurance amount is the basis for benefits that are paid to an individual
That higher baseline would last for the rest of your retirement and serve as the basis for future increases linked to inflation. While it’s important to consider your personal circumstancesâit’s not always possible to wait, particularly if you are in poor health or can’t afford to delayâthe benefits of waiting can be significant.
Be aware that if you decide to wait past age 65, you may still need to sign up for Medicare. In some circumstances your Medicare coverage may be delayed and cost more if you don’t sign up at age 65. If you start Social Security benefits early, you’ll automatically be enrolled into Medicare Parts A and B when you turn age 65.
Your annual Social Security statement will list your projected benefits between age 62 to 70, assuming you continue to work and earn about the same amount through those ages. If you need a copy of your annual statement, you can request one or view it online on the Social Security Administration portal.
Calculating The Required Minimum Distribution
The required minimum distribution for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRSs Uniform Lifetime Table. A separate table is used if the sole beneficiary is the owners spouse who is ten or more years younger than the owner. In this regard, the following materials will be useful to you in determining required distribution amounts and payout periods:
- worksheets to calculate the required amount
- tables to calculate the RMD during the participant or IRA owners life:
- Uniform Lifetime Table for all unmarried IRA owners calculating their own withdrawals, married owners whose spouses arent more than 10 years younger, and married owners whose spouses arent the sole beneficiaries of their IRAs
- Table I is used for beneficiaries who are not the spouse of the IRA owner
- Table II is used for owners whose spouses are more than 10 years younger and are the IRAs sole beneficiaries
Inherited IRAs – if your IRA or retirement plan account was inherited from the original owner, see “required minimum distributions after the account owner dies,” below.
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Asking An Uncomfortable Question Can Help You Create Your Most Comfortable Retirement
You can claim Social Security anytime between your 62nd and 70th birthdays. That’s a span of eight years or about 2,900 days. Picking the right day or month to apply for your retirement benefit within that lengthy window can be overwhelming.
Fortunately, there’s one factor that should carry the most weight in your Social Security timing decision. It’s a bit morbid, but here’s the question to ask yourself: How long do you expect to live?
Why Is Understanding Your Life Expectancy Important For Retirement
You’ll have to recalculate your budget and possibly adjust your mindset about money when you’re no longer earning a regular paycheck. It’s important to save enough before you retire to cover your financial needs for the rest of your life, including significant expenses, such as medical bills and long-term care. Once you understand your life expectancy, you can set a target for your net worth at retirement age. You can make the most of your retirement funds by figuring out the amount of tax you’ll owe during retirement, which varies based on the type of retirement account you have. For example, if you have a Roth IRA, you pay taxes on the funds when you set them aside, and you won’t need to pay income tax on the withdrawals during retirement. On the other hand, a traditional IRA saves you money on income tax when you put funds in the account, but you’ll need to pay the tax when you withdraw the money after you retire.
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How Does A Break Even Calculator For Social Security Work
The basic premise of a break even calculator is based on the way Social Security benefits are calculated, where the earlier you file the lower your benefit will be. Waiting longer can get you a higher benefit amount but by filing at a younger age, youll receive more benefit checks in total.
This is why you need to understand the break even point. If you file later, your benefit will be higher. When compared to the same life expectancy as filing early, youll receive larger checks but for fewer months.
The age at which filing early versus filing later results in the same amount of cumulative payments is your break even age.
For example, lets use a very basic benefit amount that doesnt include any cost of living adjustments. Lets assume that your full retirement age benefit is $2,000:
- If you file at 62 you would receive $1,400
- If you wait until age 70, you would receive $2,480
Using simple math you can see that the total benefits you would receive in each scenario would be equal, or break even, at 80 years and 4 months. For every year you live beyond this age, the choice to file later is the winner as youll have more money by waiting to claim benefits than you would have if you filed early.
But what if you dont expect to live until 80 years and 4 months? Youd actually be better off by filing for benefits sooner.
How Can You Tailor Your Retirement Strategy Based On Your Life Expectancy
Life expectancy is a major factor in retirement planning. After all, its important to estimate how long your money needs to last. Planning for 15 years in retirement looks very different from planning for 30 years or longer.
Considering your life expectancy can help you adapt your savings plan, choose when to claim Social Security and create a more accurate retirement budget.
Tips for Retirement Strategies Based on Life Expectancy
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How To Use The Ssa Life Expectancy Calculator
Death isnt the most pleasant thing to think about. But the reality is it will happen to all of us.
The SSA has a vested interest in the timing of your death. Thats because theyre responsible for making sure you receive timely monthly payments from the moment you start claiming your Social Security benefits until you die.
As a reminder, you can start claiming Social Security at age 62 but money expert Clark Howard prefers that you wait until age 70 for a variety of reasons.
So the SSA life expectancy calculators sole purpose is to help you understand how long youre likely to live in retirement. Armed with that info, you can make an informed choice about when to start benefits.
Using the calculator is easy. Just pop in your gender and your date of birth and youll get an estimate:
The info you get is based on the latest actuarial tables about life expectancy complied by the SSA, which are updated every year.
However, this longevity calculator doesnt take into account the following factors that could increase or decrease your life expectancy:
Heres Another Longevity Calculator Thats Worth A Look
For a more complete assessment, Blueprint Income has a robust longevity calculator developed by the University of Pennsylvania that you may want to give a try.
It includes questions about your age and physique, life events, fitness and lifestyle. Youll get a customized life expectancy based on 400,000 data samples from the National Institutes of Health.
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