Planning for retirement can feel overwhelming. How much money will you need? And when should you start saving? Will you be able to retire within the next few years, or will you be working longer than you expected?
Social Security is just one of the many things that must be considered when making this critical decision. Did you know that the age you claim your Social Security benefit has a major effect on your lifetime income?
The good news is calculating these differences is easy, even if you're not a mathematician. All you need is this handy tool that helps you calculate your estimated benefits.
This free tool is from the Consumer Financial Protection Bureau, and it's safe and simple to use. Just enter your date of birth and highest work income, then get your estimates. Here's an example of what the estimates look like:
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Based on the date of birth entered and highest annual work income, this individual's full benefit claiming age is 66. That just means this is the age when your Social Security benefit will reach its full value with no reductions.
Beyond the basic estimations, the tool is also able to offer recommendations that are more specific to your particular situation. You'll just have to answer some additional questions, such as your marital status, how long you plan to work, general expenses, additional sources of income, and if you consider yourself to be relatively healthy. When you answer these questions, you'll be shown more recommendations on steps you should take to plan for your retirement and maximize your benefit.
Ready to give it a try? Click the blue button below and you'll be directed to the Consumer Financial Protection Bureau's Social Security planning tool!