The breakeven point for a single individual is a fairly simple calculation.
The actuaries at the Social Security Administration designed the system so that a person living to the current life expectancy, based on the current mortality tables provided by the US government, will have received the same amount out of Social Security by everyone who reaches life expectancy age.
However, for a married couple the calculation is far more complex. In order to understand the breakeven analysis for a married couple you must go through an exercise that may explore up to and even over 800 different options of how you can claim your Social Security. Each one of those different options will provide a different breakeven point.
It’s important not to make a Social Security decision based on a breakeven analysis but rather an analysis that allows your retirement plan to have the highest success possible. This is even yet a far more complex scenario. You have to take into consideration every source of income that you have, how long you may live, and the estimation of how long your spouse may live. It also has to take into consideration the taxation of your Social Security benefit, how those Social Security checks will impact other forms of income, and how those other sources of income will be taxed.
When you’re putting together your retirement plan this is one of the most critical elements. The advisors at Barber Financial Group are well educated and are ready to help you maximize your Social Security benefits.
If you’d like to learn more about Social Security, make sure to check out our Education Center. There you will find free online workshops, upcoming webinar times, audio books, reading material on this topic, as well as many other retirement topics. As always, if you’d like to schedule an appointment with one of our advisors, fill out the form below.
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The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.