# Notice: I tested 2 free Social Security retirement calculators, and here is what I found

Mike Piper is the author of the book “Social Security Made Simple”. In addition to explaining how Social Security works, he recently created an interactive calculator, Open Social Security, to help you figure out when is the best time to claim Social Security benefits.

I tested it with a few hypothetical cases. I also ran the same cases through another free calculator from Financial Engines. Both calculators offer advanced options. I left everything at the default settings.

###### Case 1

This simplest case concerns a single person who has never married.

Hypotheses: Female, single, never married, born April 1958. Estimated benefit is \$ 2,500 / month at full retirement age.

Open social security: Start at 69 years and 4 months.

Financial drivers: Start at 70.

While Open Social Security suggested a slightly different start date, it also shows that if it starts at age 70, as suggested by the Financial Engines Calculator, the total benefits are only 0.15% lower over the course of his life. I wouldn’t lose sleep over whether the best time to start should really be 69 and 4 months or 70. Starting somewhere between 69 and 70 would be good.

###### Case 2

Case 2 concerns a married couple with similar ages and income.

Hypotheses: The husband was born in April 1954, the wife in April 1957. The estimated benefit is \$ 2,000 per month for both at full retirement age.

Open social security: The woman begins at 62 years and 1 month. The husband begins at the age of 70.

Financial drivers: The woman begins at 65. The husband begins at the age of 70.

The difference is only when the woman should start. Open Social Security shows that the fact that the woman starts at 65 instead of 62 and 1 month reduces lifetime benefits by 0.8%. Again, because the difference is quite small, I would say both calculators point in the same direction. Whether the woman should really start at 62, 65, or anywhere in between doesn’t really matter.

###### Case 3

In case 3, the age and income differences between husband and wife are greater. The estimated benefit for the lower-income spouse is always greater than 50% of that for the higher-income spouse.

Hypotheses: The husband was born in April 1953, with an estimated pension of \$ 2,435 per month at his full retirement age. The wife was born in April 1959, with an estimated benefit of \$ 2,044 per month at full retirement age.

Open social security: The wife starts at 62 years and 1 month (the husband is 68 years and 1 month at this time); the husband files a restricted application to claim spousal benefits at the same time. The husband switches to his own benefits at age 70.

Financial drivers: The same.

The two calculators agree. In this case, the husband can claim two years of spousal benefits because he was born before the deadline for changing the laws a few years ago.

###### Case 4

In case 4, the lower paid spouse is older. Her estimated profit is less than half that of her husband.

Hypotheses: The husband was born in April 1965, with an estimated pension of \$ 2,367 per month at his full retirement age. The wife was born in April 1962, with an estimated benefit of \$ 1,000 per month at full retirement age.

Open social security: The wife starts at 65 years and 5 months (the husband is 62 years and 5 months at this time). The husband waits until the age of 70; the wife also switches to spousal benefits at this time.

Financial drivers: Wife claims to be 67 (husband is 64 at the time). The husband waits until the age of 70; the wife also switches to spousal benefits at this time.

Again, the two calculators roughly agree. The financial engines calculator suggested age 67 because it only deals with annual ages. Open Social Security shows that the difference in total lifetime benefits between a woman starting between 62 and 67 is less than 0.25%. In this case, the option to file a restricted application for spousal benefits is not available to the husband because he was born after the deadline for changing the laws a few years ago.

###### Which one are you listening to?

The two free calculators pretty much agree in all of these relatively simple cases. I like the “compare alternatives” feature in Open Social Security. We find in one case that a difference of five years in the time of application makes little difference in the total lifetime benefits. So, as long as you are heading in the right direction, you don’t have to be very specific about the actual timing.

Besides the two free calculators, there are also two paid calculators, Social Security Solutions and Maximize My Social Security. If you have complex situations like previous marriages, family allowance, disability allowance, etc., maybe the paid calculators will give you something different. If you have simple cases, I think the free calculators will do just fine. That said, for a one-time cost of around \$ 50, even if you just wasted it because you want a second, third, or fourth opinion, it still wouldn’t matter.

Finally, we have to keep in mind that all calculators make longevity assumptions and projections, which will not match your actual longevity. We can only make the best-informed guesses. A 1% difference in total lifetime benefits based on a calculator’s assumptions and projections may well be within the real-life margin of error.

###### Early retirement

Open Social Security asks you for an estimate of your Primary Insurance Amount (PIA), which is the amount you will receive if you start your benefits at your full retirement age. The estimate that appears on your Social Security Administration statement assumes that you will continue to work with your current income until you reach full retirement age. If you are planning to retire earlier, you need a different estimate of your PIA.

Open Social Security asks if you are still working and when you will stop working, but these questions are not used to estimate your PIA in case you take early retirement. They are used to calculate changes in benefits due to the earnings test. This other free online tool will help you get an estimate of your AIP if you plan to retire before full retirement age.

Harry Sit is the founder of Advice-Only Financial, a company specializing in finding financial advisers. He blogs at The Finance Buff. This is adapted from an article on his site titled “Social Security Claim Strategy Calculators Compared” and is republished with permission.