It explains their advantages and limitations, what types of information the tools require of the user (inputs), and what types of information the tools provide (outputs). This note provides information on six publicly available online retirement planning tools that focus primarily or exclusively on the Social Security claiming decision. However, the consensus on these tools is that they are helpful if users understand their limitations (Powell 2010, 2015 Tresidder 2011). The authors conclude that only 30 percent of the online tools succeeded in providing adequate advice while the other 70 percent provided inaccurate, ambiguous, or unclear advice. The latter study also suggests that the tools' different input variables and default assumptions drive differences in the results and thus in the suggested actions (or lack thereof). Another study (Dorman and others 2016) examines the effectiveness of 36 such planning tools and identifies more than 20 factors that provide consumers with credible recommendations and reliable education about their retirement options but are not used consistently by the tools. Research has found that users of publicly available retirement planning tools may make irrational decisions based on suboptimal advice (Turner 2014). Such tools share the general goal of helping the public prepare for retirement.Īs with any other online resource, the user must understand the purpose and limitations of each tool before following any advice it provides. Lastly, as part of their services offering comprehensive retirement advice, for-profit companies such as Financial Engines and Bankrate also provide online Social Security calculators. Outside of government, academic organizations such as the Center for Retirement Research ( CRR) at Boston College and nonprofit organizations such as AARP 1 have developed tools as well. Recently, the Consumer Financial Protection Bureau ( CFPB), another government agency, worked with SSA to develop its own online Social Security benefit calculator. The Social Security Administration ( SSA) provides a variety of online tools to inform individuals about the claiming decision and the program rules that may affect it.
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To help individuals facing this complicated decision, various groups-from the government to financial services firms-have developed free online benefit calculators. An adequate stream of inflation-protected income can guard against poverty in old age. Social Security benefits continue as long as a person lives and are inflation-protected through an annual cost-of-living adjustment. The increase for deferred claiming stops accruing at age 70. The earliest possible age to claim retirement benefits is 62. If claiming is deferred until after FRA, monthly benefit amounts are permanently increased, but they are collected over a shorter period. Benefits claimed before reaching FRA are permanently reduced, but they are collected over a longer period.
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Benefits may be claimed before, at, or after full retirement age ( FRA), which varies depending on year of birth. As retirement nears, an individual must decide at which age to start receiving benefits. Social Security provides monthly benefits to eligible retired workers and their families. When to claim Social Security retirement benefits is one of the most important financial decisions an individual can make.
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