A good Social Security calculator can help you get more lifetime benefits by showing you customized claiming strategies that you would not likely be aware of without the use of software. The best Social Security calculators I can find are listed below. Content organized as follows:
- QUESTIONS TO USE IN EVALUATING CALCULATORS
- FOR A FEE
- FOR FREE
- FOR FINANCIAL ADVISORS
- ADDITIONAL RESOURCES
The questions below will help you evaluate the calculators to find one that meets your needs.
1. QUESTIONS TO USE IN EVALUATING SOCIAL SECURITY CALCULATORS
- Does the software intake use a set value such as your benefit amount at your Full Retirement Age (referred to as your PIA) or does it allow you to input your entire earnings history? If one of you is still a few years away from claiming, inputting your earnings history and projected earnings will deliver a more accurate answer.
- Does it allow you to input inflation and discount rates? Some calculators do not allow for these types of inputs, and it can change the answer.
- For discounting future cash flows into today’s dollars does the software use standard discounting, which simply uses your discount rate to translate future dollars into today’s dollars, or actuarial discounting, which adds in the probability you are alive at a particular age? (Actuarial discounting is used by insurance companies when pooling risk across large populations; some academics feel it is not appropriate to use on an individual basis such as calculating you and your spouse’s benefits.)
- Can you adjust longevity for each spouse?
- If you are divorced, can it handle ex-spouse situations?
- What about multiple ex-spouses?
- Does it include WEP/GPO Windfall Elimination Provision and Government Pension Offset) calculations and ask for pension info in such a situation? (This may affect you if you will be eligible for a pension from a federal, state, or local government or foreign country, and this pension covered earnings/work that was not covered under Social Security.)
- Does it include the calculation for child benefits if you have dependents?
- Does it work if one spouse has already started collecting and you are trying to determine when the remaining spouse should begin benefits?
- Does is calculate voluntary suspension options as possible choices for you if you (or spouse) already started benefits?
- Does it work in widow/widower’s situations?
Note: If you are a software developer and would like to send me the answers above in regards to your calculator, you are welcome to email me at email@example.com.
2. FOR A FEE - ONLINE SOCIAL SECURITY CALCULATORS FOR CONSUMERS
Why pay a fee for Social Security advice? The Center for Retirement Research has a booklet that describes your Social Security decision as "A guide to the most important financial decision you’ll likely make." Many of your choices are irrevocable. Making the wrong choice will cost you money.
Software developers have spent much money and time working to create tools that can help outline and advise you on your choices. In my opinion they charge only a minor fee when compared to the impact of the advice they deliver.
Some calculators use different forms of logic than others and many of them are frequently updating their features. Use the questions above this section to evaluate the calculators and find one that offers advice pertinent to your needs.
- Maximize My Social Security covers all the Social Security claiming scenarios one might encounter: retiree, spousal, survivor, divorcee, parent, and child benefits as well as calculations for the windfall elimination provision and government pension offset (which will affect you if you receive a pension from an employer who did not withhold Social Security tax from your earnings - such as a state employee.) It costs $40 for an annual license. Be prepared: this Social Security calculator requires you to input your complete past and projected earnings history, which you can get now get from your online Social Security statement.
- This calculator is by far the most user friendly of the Social Security calculators and the output is delivered in a fantastic clear, easy-to-understand report which provides your personal recommended claiming strategy. This calculator is great for married couples who are near claiming age as it incorporates advanced spousal switching strategies and only requires a few pieces of data. They offer options for you to do it yourself by ordering a downloadable report for about $19, a year long subscription to their online software to design your own claiming strategy for $49, or you can work with an expert over the phone. You can even have one of their advisors file for you. Kiplinger also offers their branded version of this calculator at Kiplinger's Social Security Solutions.
- This calculator which provides an overview of several different pre-selected claiming strategies, or you can input your own strategy. Price ranges from $10 - $40 depending on your status such as married, widowed or divorced. They provide a detailed report that provides tables so you can see a month by month or year by year comparison of your potential claiming strategies. They also offer a version for your iPhone which you can download from iTunes.
- Although not an online calculator, for a modest fee Social Security Choices will provide a customized report that provides advice for claiming decisions for single, marrieds or widow/widowers.
3. FOR FREE - ONLINE SOCIAL SECURITY CALCULATORS
Free Social Security calculators can give you a good overview of some of the challenges involved in deciding when to begin benefits, but the free calculators are missing some of the nuances and claiming strategies that some of the for fee calculators have available. In short, I'd play around with a free calculator, but I don't think I'd base my final claiming decision on what I see.
- This is a FREE easy-to-use calculator that provides great information on how earnings from work can reduce your benefits if you claim before you reach Full Retirement Age. It also provides a recommended claiming strategy in a summary format, but you have no way to dig in and see the data tables supporting the answer.
- This free Social Security calculator is one of the best free options I have come across. After you input your data, although it does not provide a fancy report, it will provide a claiming recommendation with a detailed list of what each spouse needs to do and when. It was designed by a registered investment advisory firm out of California. They do require you to create a log in and password, but have assured me that do not use that information to solicit you in anyway, nor do they sell it to anyone.
- This is the same provider by the same name listed under the FOR A FEE section. They also give you the ability to get a free report about your claiming options after inputting some basic information.