Calculate Your Break-Even Age to Make the Best Social Security Claim Decision

Calculate your break-even age

Before you decide when to start your retirement checks, you should calculate something called your break-even point or age. This is the age at which the benefits you receive from two different claiming scenarios become equal. From that point on, the scenario that offers the larger monthly benefit will offer you greater Social Security income over the course of your life.

• Figure out what your benefit will be at 67 (scenario 1). You can create an account at my Social Security to estimate your benefits at different ages.
• Calculate how much your benefit will increase if you wait until 70 (scenario 2) -- my Social Security can also help you with this. That said, you can also learn how early filing penalties and delayed retirement credits work and do the calculation yourself.
• Determine how much income you'll miss out on during the three years you don't get payments because you choose to delay your benefits (multiply your monthly benefit in scenario 1 by 36 months).
• Divide the above number by the extra amount you get in your check from scenario 2 over scenario 1. The resulting number is how many months it will take your larger, delayed benefits from scenario 2 to accumulate and become equal to the total benefits received in scenario 1.

Why is calculating break-even age so important? When you're choosing between two different claiming ages, you can use your break-even point to figure out if you're better off starting Social Security at the earlier age or the later one. The break-even calculation provides a crucial data point to help you determine your optimal claiming age, so be sure to do it before filing for your first Social Security check.

The $22,924 Social Security bonus most retirees completely overlook

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