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  • Writer's pictureChris Stein, CFP®

Social Security Optimization Tools

A reader from Michigan asks for the best free and paid Social Security claiming optimization tools.

"Over the years, you have referenced resources for Social Security claiming analysis tools. What are the best free and paid tools you have used to provide analysis on claiming strategies? What advanced/professional tools do you use in your planning practice with clients?"

We have many do-it-yourselfers among our readers. Hopefully, they realize that the official estimate you receive of your Social Security benefits may or may not be accurate for your particular circumstances. The reason is that Social Security is making some specific assumptions to develop your benefit estimate. If those assumptions are too different from your reality, their prediction could be off – even by a fair amount.

Social Security's estimates are pretty decent for many people; for some, they're not. Social Security Statements of benefits estimates also don't suggest any strategy. They don't try to sway you by saying, "Oh, claiming at this age – or that age – is better." In fact, they're prevented by law from providing that kind of guidance. You can certainly talk to Social Security and ask them about benefits under specific claiming timing, for example, and they'll answer your questions. But they're not going to suggest strategies.

Strategies tend to come up when couples are involved – when you have multiple benefits that you might be able to claim. For example, certain strategies might increase your lifetime benefits, and you'll want to consider them. For single people, the strategies are more likely "At what age should I claim?" or "What's right for me?"

But with couples, things become more interesting, especially when you involve events such as one person being previously married, having lost a spouse, or having young children that will be 18 or younger when they start collecting Social Security. Those types of variations open up even more potential for strategies or analysis.

While looking at such variations is interesting, it's hard to do by hand: doing your own research and penciling it out on an Excel spreadsheet, for example. That's when different tools become appealing.

First, let me give some credit to the Social Security Administration directly. They have some tools that are free to use. Even the basic Social Security Statement they send you is likely pretty accurate – close to what your benefit will be – if you're close to or older than your age of first eligibility. (That's age 62 for standard retirement benefits.) In that case, I wouldn't be particularly concerned about using the estimate you get from Social Security in your forecasting.

However, the younger you are, and the more different you are from their base assumptions, the more valuable online tools become. You can model things within the tool and come up with an estimate of benefits more specific to your case.

Two Key Assumptions Made by Social Security

Let me share the two key assumptions that can cause a Social Security estimate to differ from your reality. If you read the fine print, those two assumptions are the following:

(1) That going forward, you will continue to earn what you earned last year until claiming age.

When you look at the benefits estimate that Social Security gives you for ages 62, 67 and 70 (plus the years in between), it's assumed you'll continue earning money at the rate you earned last year. If you earned $0 last year, they look at the year before.

Well, say you're 58 years old, you're planning to retire imminently, and you made $150,000 last year. Social Security will assume in your Social Security Statement that you'll earn $150,000 yearly until age 67, whereas, in reality, you're considering retiring at 58. You can see how your reality will differ from what Social Security assumes. They know your earnings history so that part will likely be accurate, but not future earnings.

(2) That there will be no further future wage inflation from today forward. Wage inflation plays a part by affecting your earnings record up to the year you turn 60. So, if you're 60 or over, this assumption is not that concerning. If you're younger – say, in your fifties – and you're pulling your estimates statement for the long-term forecasting part of your retirement model, that assumption can cause your Social Security benefit estimate to be way too pessimistic.

Why does that happen? Because at no time has there been a long period of 0% wage inflation in the United States. You may have 0% for a year or two, but there's never been anything close to a ten-year period with no wage inflation. So why does Social Security assume something that's not historically supported? They do it on purpose. Some assumptions understate the ultimate benefit to encourage people to save more of their own money.

Now, with that bit of background, let's look at the tools that may help figure this out for you.

Online Tools for Social Security Calculations

The Social Security Administration has some tools. Not all are particularly easy to use, but it's a free resource, and you're going straight to the horse's mouth.

Within the free category, AARP has a tool that some people like to use. I happen to like I haven't looked at it recently, so if it has changed, that could change my opinion. This Social Security calculator is at, not Software engineers put it together so we can trust the code behind it. I've seen lots of people have success with it. is another tool that is very popular with people. I have concerns about its use as I think people may misinterpret what the results are really telling them. It takes a particular approach to valuing your lifetime Social Security benefits. It's probably a good tool for someone for whom Social Security is not a make-or-break decision but who is trying to make the best choice regarding concepts like breakeven and net present value using statistics.

Open Social Security doesn't look at Social Security the way we do, which is by favoring its value as a longevity protection tool. If that's the intent, analyzing by default (as Open Social Security does) isn't the best use, even though you can change some of the factors. Yet, many people use and like it a lot – so it depends on how you view Social Security.

We view it very specifically, seeing its power as a longevity protection tool. We're seeking confirmation of lifetime guaranteed secure income to cover your minimum dignity floor expenses, that is, on the long-term benefits. We're not looking for the breakeven, comparative present value that determines your best chance of getting the most money over your lifetime based on median life expectancy or mortality tables.

There are two online programs in the paid category that we are familiar with. is very popular and is available for individual use. You can access its basic version for as little as $20 for a complete do-it-yourselfer. They also offer packages where you get help from an expert at a higher cost. The program is very powerful, using factors such as the probability of survivorship at each age and discounts. It does everything other programs might. (originally is the one we use at our firm. It was developed by Larry Kotlikoff of Boston University, an acclaimed economist working extensively in the Social Security space. For individuals, it provides a Base Plan and a Maximized Plan that cost $109 and $149 per year, respectively, allowing you to rerun your calculations as often as you wish during the year. [NOTE: this is not the $39 Chris mentioned!] MaxiFi Planner also offers expert review services by a specialist at $250 per 1-hour video consultation session.

Our company uses MaxiFi Planner PRO because it does everything we need. For professionals, it costs $599 a year ($459 for renewals) to use that tool on up to 100 clients at any one time.]

Because we look at Social Security primarily as a longevity protection tool, we want as accurate a Social Security benefit estimate as possible based on a client's specific situation. MaxiFi Planner and Social Security Solutions both allow you to calculate that. We can input earnings histories, earnings going forward, expected retirement dates and countless other details. In return, we have a reliable estimate of clients' Social Security benefits.

That reliability is critical because we will count on those estimates to help cover clients' minimum dignity floor expenses for the rest of their lives. Every once in a while, the software will pick up on a strategy that we hadn't considered. It may suggest a claiming strategy between the spouses or uncover a child benefit. Some of the more complicated cases are hard to do by hand. The software helps us look at less obvious options we might want to pursue.

A Word of Caution

A word of caution to do-it-yourselfers: programs will do what they're programmed to do. Just because the program says, "This is the optimal claiming strategy for you," remember that they approach the decision differently. All approaches are fine, but while the software makes a projection, it cannot factor in aspects of the individual's life: what's happening, special circumstances, etc. It may identify the optimized solution – but that's not necessarily the appropriate Social Security claiming strategy.

If you look at what these programs put out, look at your situation and ask, "Does it make sense?" Maybe it doesn't. They're giving you a standalone optimization that's only considering Social Security and no other part of your overall financial situation. Social Security is just one piece of that situation, and how that piece fits into the greater plan should be considered.

Online tools have value when used correctly, but they aren't comprehensive planning tools. Instead, they're standalone Social Security analysis tools that should then benefit from a human's understanding of how the tool's output factors into the individual's specific life.

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