Understanding Social Security: How these online tools could lead to increased benefits
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Knowing when to apply for your Social Security benefits can have a significant impact on your retirement lifestyle. For example, if you claim early and you could face a steep and permanent reduction in your monthly income.
Find: 15 worst states to live on just a social security check
See: 10 reasons why you should file for Social Security sooner
It might sound a little daunting, but there are tools out there that can help you figure it all out and make the best decision. Here are four Social Security tools to use to determine when to apply for and collect benefits, originally reported by CNBC Select.
The Social Security Administration website
The SSA website offers several free calculators to help you determine your full retirement age and the impact of your earnings before full retirement age on your benefit amount. There is also a retirement estimator that calculates your monthly benefits from SSA data on your earnings history.
However, if you have a spouse or other sources of retirement income, you may need to use other tools.
Open social security
This free calculator takes into account several factors, including whether you have a spouse, the average lifespan of men compared to women, and the possibility of benefits being reduced in the future. This tool can also provide you with your annual Social Security benefits and your accumulated income with a spouse during retirement.
AARP Social Security Calculator
The AARP calculator tells you your monthly benefit amount based on when you choose to collect. It can also tell you how much of your living expenses (which is based on the average monthly living expenses of a retiree) your Social Security benefits will cover.
Two potential problems with this calculator are that it determines your monthly benefit based on your average annual salary and that it determines cumulative benefits based on whether you received at age 70.
This software can help you create a plan that allows you to have a consistent standard of living after retirement. It also tells you when to withdraw from your retirement accounts and when you and your spouse should file for Social Security benefits. However, this software is not free. The standard plan costs $109 for the first year, then $89 each year thereafter.
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