The Importance of a “Break-Even” Calculation
As we’ve noted repeatedly on this site, the question of when to claim Social Security benefits is one of the most frequent questions received at the AMAC Foundation’s Social Security Advisory Service. Because of its consequences, we take great caution in explaining the variables that need to be considered to arrive at the decision most appropriate for each individual’s situation, and one of the tools we frequently use in this analysis is the execution of a “break-even” calculation to determine the age at which an individual will have collected the same amount of money whether starting benefits at age 62 or at full retirement age. Or, to determine how long an individual needs to live to break even if you wait until age 70 to claim, versus claiming at your FRA. As explained in a post by The Motley Fool’s Christy Bieber today on their website, not considering a break-even analysis would rob you of “vital information needed to decide on your Social Security claiming strategy.” Read Ms. Bieber’s post here.
Also, if you need assistance in calculating a personal “break-even” point, know that the AMAC Foundation’s Social Security Advisory Service can assist you, free of charge. Learn more about this service here.