March 27, 2012

AARP Social Security Benefit Calculator

The AARP website has a Social Security Benefit Calculator.   The calculator helps you figure the best method of claiming social security to maximize your benefits.

Most people apply for their social security benefit early almost as soon as they are eligible at age 62.   The simplest way to get higher benefits is to wait until the maximum benefit age of 70 years old.   For married couples there are other tricks like claiming a spousal benefit early or suspending and later resuming your benefits.

Here are a couple example scenarios that I ran through their calculator and the resulting steps they recommended to maximize the Social Security benefits:

Example #1 ) A married couple with a husband age 40 who makes $120,000 and a wife age 41 who makes $80,000

When your wife is 67 she applies for SS and then requests payments be suspended.
THen you apply for spousal benefits and get $1091 a month
When your wife turns 70 she resumes benefits and gets $2706 a month
You apply for your own SS at age 70 and get $3168 a month

Example #2 ) A married couple with a wife age 35 making $80,000 and a husband age 40 who makes $45,000

When husband is age 70 applies for SS and gets $1979 /mo.
When wife hits age 67 she applies for spousal benefit at $798
When wife hits 70 she applies for her own SS and gets $2678.

If you're nearing retirement age then you should take some time and investigate how you might maximize your social security benefits.   The AARP Social Security Benefit Calculator is one tool to use.  


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