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Social Security Break-Even Analysis - Portfolio Toolbox
Portfolio Toolbox
Social Security card

Social Security

"Time in the market is more important than timing the market."

Should you start collecting Social Security at 62 or wait until 70? You can start collecting Social Security as early as age 62, albiet at a reduced rate from your full retirement age of 67. Each year you delay increases your benefit by about 8%. You can take advantage of this 8% increase until you reach age 70. Social Security is designed to pay out about the same amount of money based on your life expectancy regardless of when you start collecting. This tool will help you to visualize the break-even point based on your individual circumstances.

If you don't need the money to live off of and decide to invest your Social Security payment, it opens up some possibilities. If you earn 6% per year on the money, you will accumulate more than if you start collecting at 70 until you reach 95. If you die before needing the money, you can bequeath it to your heirs. With a 7% return, you will have more money by starting at age 62 until you reach 100 years old.

You will need your estimated Social Security payment at your full retirement age 67 to get a personalized estimate, otherwise you can simply enter any value. You can obtain your personal Social Security estimate from my Social Security by logging into ssa.gov. Calculations can take into account taxes based on the 2019 tax table, and it doesn't drastically change the results. Calculations do not include cost of living adjustments (COLA) or take into account spousal benefits. If you would like to consider these scenarios as part of your claiming strategy, see Open Social Security for help.

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Estimated annual return on investment
Birth year
Monthly Social Security payment
at full retirement age 67
Pay taxes on Social Security income?