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Get more from Social Security

By Jennie L. Phipps ·
Thursday, March 21, 2013
Posted: 4 pm ET

It seems like deciding when to take Social Security should be a no-brainer, but if that's your conclusion, you're making an expensive retirement planning mistake.

Choosing the right time to file for Social Security can make hundreds of thousands of dollars' worth of difference in your retirement income.

Recently, there have been a sprinkling of new, free tools designed to help people decide the best time to file. One of the most interesting of them, Social Security Benefits Evaluator, was introduced Thursday by investment management firm T. Rowe Price.

Unlike the AARP Social Security Benefits Calculator, which is also free, the T. Rowe Price tool allows you to easily see the total accumulated difference in dollars generated by various strategies. It makes it obvious that one size doesn't fit all.

About 70 percent of people take Social Security at the first opportunity -- when they are 62. While that might seem like the right strategy, Christine Fahlund, senior financial planner for T. Rowe Price, says the intuitive choice is often the wrong one.

For instance, Fahlund says that when faced with the illness of the higher-earning spouse -- usually the husband -- many couples rush to file for Social Security benefits immediately so the ill spouse can collect as much as he can. That's a mistake, she believes, because the surviving spouse will be entitled to the higher-earning spouse's benefit at the time he claimed. If he doesn't claim, the surviving spouse gets the amount he would have gotten at the time of his death. By filing at the beginning of his illness, they lock in a lower benefit than the surviving spouse would otherwise have gotten had they delayed filing.

The T. Rowe Price calculator allows its users to vary their retirement planning goals and Social Security strategies to see the impact of different decisions. Fahlund recommends that people pay special attention to the cash flow tool on the vertical bar graph.

"You'll see what a tiny part of cash flow those first years are.  It feels like a lot of years to wait, but when you see how many bars are coming after age 66 (full retirement age), you realize that the 60s are just the tip of the iceberg for most couples," she says.

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Sam Sayger
March 03, 2014 at 11:28 pm

At age 62 I was disabled with heart problems - 100% and was drawing SSI so it was a no-brainer for me to begin at aged 62. That, plus the fact that your amounts are based on your LAST ten years of employment - which in three more years would have reduced the no. of years by three and thereby reduce my amount at age 65. Since I had already been disabled for six years that would have left only one year for the SSA to deduce my amount - to your formula has to be considered carefully and is different for many, many people. Make that CRYSTAL CLEAR>

ron cudmore
March 03, 2014 at 2:50 am

who said collect ss early as the the longevity bet odds are bad, so claim early, you never know when the bell ring.

Ron Peterson
January 27, 2014 at 9:47 am

Our scenario:
I am 65, working and not collecting SS. My wife is 56, not working nor has she worked enough to accumulate the necessary "quarters" to collect. In addition, she has M.S. I plan to work at least two - three more years. Any suggestions as to how we should proceed? Thanks

January 26, 2014 at 11:00 am

I would like to no if you can collect SS Disability and SS retirement when you turn 62 or will I just draw on my SS Disability for life.

May 17, 2013 at 7:46 am

i have a simple question...the previous person speaks of a cap on your benefits, how does that work...

Rick ODom
April 15, 2013 at 5:19 am


I follow your articles and also Kandice Bridges about social security and the potential to delay until age 70 to increase ones benefits. There is one fallacy to this that everyone who writes about SS overlooks. That fact is that SS is capped yearly. My projected wait value is supposed to be $3300 per month, however, due to the current cap of $2514 (not sure about 2013) my benefit should be $2880. With the cap, I fall 300 short. If I wait until 70, it will never approach the value number the SSA has said I would receive. If over cap, take at max at 66. You need to point this out. I have never seen any one address this part of SS, you should for those of us that have worked hard and should NOT delay our pull from SS.