If you plan to rely solely on your social security check for retirement, you may want to rethink. Here's why.

How would you decide when to claim social security?

Many will be recipients using a break-even analysis that actually tells them age (or ages) when it makes the most economic sense to claim benefits.

Using this kind of analysis can help. But experts say it should not be the only factor you consider when deciding when to apply for social security. Why? First, it is worth explaining how to calculate the even age.

Break-even Calculation

You start the analysis by calculating what your accumulated benefits would be based on the age you are applying for social security.

So let's say you are projected monthly benefit is $ 2,871 if you apply for social security at your full retirement age of 67 $ 2,054 if you file at age 62; and $ 3,706 if you files aged 70 years.

And let's say you apply for social security at the age of 62. After 10 years, your cumulative benefit will be $ 246,480. If you started at the age of 67, your cumulative benefit would be $ 172,260 and if you waited to claim up to 70 years, your cumulative benefit would be $ 88,944. This means that if you claimed to be 62 years old and died before 72 years of age, you claimed to produce the highest cumulative benefit.

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But what happens after 20 years when you are 82? Well, if you claim to be 62, your cumulative benefit will be $ 492,960. However, if you archive at the age of 67, your cumulative benefit will be $ 516,780; And if you filed for 70 years it would be $ 533,664. This means that if you claimed to be 62 years old and lived over 82 years, you later claim, for example. 67 or 70 years, the highest cumulative benefit.

And the longer you live, the greater the economic benefit to wait. Consider what happens after 30 years. If you claim to be 62, your cumulative benefit will be $ 739,440; if you filed at the age of 67 it would be $ 861,300; At age 70, it will be $ 978,384.

Bottom Line: If you delay receiving benefits until the age of 70, it takes 10 years to break with benefits beginning at the age of 62, but it takes 11 years to break with benefits beginning at age 67 And benefits started at the age of 67 take 13 years to break with benefits starting at the age of 62 years.

Elaine Floyd, director of retirement and life planning in Horsesmouth, says for her that they have not yet claimed Social security should always calculate the value of the total number of benefits they receive and how much higher that value can be if they claim 70 against 62.

"Your social security statements do not show this," she said. "A couple can receive as much as $ 500,000 more in total benefits if they delay claiming. And this assumes average life expectancy of 84 for men and 87 for women."

You could live longer

Experts say that there are at least two problems to rely solely on the break-even analysis when deciding when to apply for Social Security. First, many people claim early because they don't think they will live past their break-even age, and they underestimate how much time they will spend on retirement.

"Workers need a solid realistic longevity estimate," says David Freitag, a financial planning consultant with MassMutual. "This should be a lot of the decision to take when taking advantage. Long life is the true wild card in the filing decision."

According to Freitag, there are a number of online resources to help you estimate life expectancy. But the best way to consider longevity is to consider your lifestyle and family history, he says.

Jason Fichtner, Associate Professor at Johns Hopkins School of Advanced International Studies, also says using a traditional break-even analysis will lead many to claim earlier than optimum and waive higher monthly performance controls later on retirement when more monthly income is likely to be necessary for healthcare costs or to supplement other cost-effective savings.

Essentially, the longer you stay longer, you'll spend money. And some can live a long time. According to Fichtner, about one in every three 65-year-olds will now live in the age of 90, and about one in seven will live 95 years of age.

Calculate for both of you

Many would-A recipients of social security also fail to consider the effect of claiming that the early will have their surviving spouse's social security benefit. Essentially, the survivor requirement decreases early while waiting to claim at least until the full retirement age that your survivor gets the highest possible benefit. A surviving spouse typically receives the benefit of the deceased spouse. However, if the deceased spouse claimed early at age 62, the survival benefit could be 25% to 30% less than it could have been.

Heather Schreiber, founder of HLS Retirement Consulting, gave this example: If you are a spouse, especially with a big difference in social security benefits, the latter of the couple will survive solely relying on the benefits of the higher wage earner at the first spouse's death.

"Therefore, it is important to see a break-even analysis based on the parties' cumulative lifetime benefits rather than being one-way focused," she says.

She notes that the inflation-adjusted income benefits from Social Security is often the only source of income guaranteed for a lifetime.

Robert Powell is editor of TheStreet's Retirement Daily and regularly contributes to the United States today. Do you have questions about money? Email Bob at

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