A New Calculator Helps You Decide When to File for Social Security

When should you file for Social Security benefits? It’s a question millions of Americans stew over.

You can start receiving benefits as early as age 62. Or you can wait until you are 70 years old. The answer, ultimately, is that like a fine wine, or an aged hunk of beef, waiting to file has its benefits. It can mean a difference of hundreds, or even thousands of dollars in monthly checks.

A new calculator from the Consumer Financial Protection Bureau in cooperation with the Social Security Administration can help you determine when to file for Social Security so you can maximize your benefits.

By typing in your date of birth, the age at which you expect to retire, and a few other pieces of information, you’ll get an estimate of how much money you can expect to receive monthly and annually, as well as the cumulative amount over your lifetime, assuming you live to the age of 85. You can use this calculator on a mobile phone.

The results can be eye-opening. Let’s say you type into the calculator a birth date of Nov. 23, 1954. You also plug in that your current annual salary is $90,000 and that you plan to file for Social Security benefits at the age of 62. The calculator will tell you that over your lifetime, you’ll reap a total of $464,232 in today's dollars. Not bad, you may think.

But it will also tell you that if you wait until age 66 to claim benefits (the age that Social Security considers full retirement age for people born in 1954), you’ll bring in an additional $44,200 over your lifetime. Hold off until age 70 and that number climbs to $65,688.

There are other calculators. Some will give you even more precise results than the CFPB’s calculator, but you’ll have to pay a fee. Others are free but may require more personally identifying information. The Quick Calculator from the Social Security Administration, for example, is free. It requires you to register on its website, and then input your Social Security number. It then incorporates your past earnings to give you a more exact projection of how much your benefits will be.

The AARP provides a free Social Security benefits calculator that, like the CFPB’s calculator, does not require personally identifying information. It estimates the benefits you’ll receive depending on when you first claim Social Security. Unlike other calculators, it also allows couples to estimate their combined benefits, useful if they claim at different ages or continue working until age 70.

If you are willing to pay a fee, Social Security Choices offers greater precision than the free calculators, taking into account not just your work history, but whether you are married, widowed or divorced. You can also tell this tool if you expect to work beyond your full retirement age. The service provides you with a customized report that tells you when to file in order to maximize your benefits.

No matter which calculator you choose, there is one common lesson you’ll learn from all of them: If you can, it pays to wait until the age of 70 to file for benefits. But never consider waiting any longer. After that age, there are no future increases in Social Security payouts.

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