It is estimated that 10,000 baby boomers are retiring every day. Most will depend heavily on Social Security retirement benefits. Particularly for a married couple, the decision on when and how to claim Social Security can be complex. This has resulted in the launch of services designed to advise you on how to maximize Social Security retirement income, based on your individual circumstances. I like the concept and will probably use one or more of these services when I approach full retirement age. I turn 62 next month but I already know I will not claim that early.
First, there is Social Security Solutions. It offers four different service plans, starting with an automated tool that provides a basic “recommended solution” for $19.95. Or for $124.95, you receive the “recommended solution” plus expert assistance from a real person. This is not very much money for help with an issue that can have permanent, life-long consequences. I will probably try the $49.95 “recommend solution plus” plan because it includes the ability to test different scenarios.
Another service is called Maximize My Social Security. This site was created by Laurence Kotlikoff, a professor at Boston University and co-author with Scott Burns (Mr. Couch Potato) of Spend ’til the End. For $40.00, you receive a personal report that tells you when to collect Social Security benefits as a retiree, or as a spouse, survivor, or divorcee of a retiree. The analysis includes application of the Social Security earnings test, reductions for early retirement, re-computation of benefits, delayed retirement credit, family benefit maximum, windfall elimination provision, government pension offset provision, option to claim and suspend, and start-stop-start strategy. I am quite sure I will give this a try as well. For $40.00, why not?
A third service is offered by Social Security Choices where you can get a free “analysis” (which doesn’t do much more than try to up-sell you) or a “premium report” for $29.99. The sample report available from the site shows you how detailed the analysis can be. Numerous scenarios are analyzed based on different claiming ages for a single retiree or a married couple. Again, this is a bargain price for the information provided.
The fourth service is free and is offered by the AARP. You answer a few basic questions and the online tool will recommend a strategy for maximizing your benefits. In our case, the recommended strategy calls for me to claim at age 69 and immediately suspend, thereby allowing my wife to claim a spousal benefit at her full retirement age while also providing me with additional retirement credits. When I turn 70, I resume my benefits at the increased amount and my wife switches to her own benefit from her work record. Keep in mind that this analysis focuses on maximizing your monthly benefit but not necessarily your accumulated lifetime benefits.
Have any of you tried these or any other Social Security optimization services?