Social Security Break-Even Calculator – Take The Guesswork Out Of Social Security Planning

One of the biggest decisions you will make as you get closer to retirement age is when to start your Social Security benefits. You probably already know that you can start receiving your benefits as early as age 62, but this will result in a reduced monthly benefit amount. If you wait past your full retirement age (FRA) to start receiving benefits, you can earn delayed retirement credits, which will increase your monthly payment.

So, when is the best time to start getting Social Security benefits to get the most money over the course of your life? A break-even calculator can help you determine your break-even age or the ideal time to start your benefits. Keep reading as we explain how your break-even age is calculated and some other factors to consider before starting your benefits. Plus, you can use our break-even calculator to determine when you should start receiving your benefits!

Social Security Break-Even Calculator


What Is The Social Security Break-Even Age?

Figurines on a chart representing retirement age.

The break-even point is the age at which your cumulative retirement income from Social Security is the same regardless of whether you started receiving benefits early or late. Once you pass the break-even point, the higher benefit amount will outpace the lower benefit you would receive if you started your benefits early. Remember that the sooner you start your benefits, the lower your monthly payment will be. The longer you wait, the higher your payment (until you reach age 70, of course). 

Think about a couple of scenarios to better understand the break-even age. Suppose you notify the Social Security Administration that you wish to start your benefits at age 62, but you will only receive $1,000 per month. Instead, you could have waited until age 66 to start your benefits, and you would have received $1,400 per month. Obviously, your monthly payment is now $400 per month more. However, by starting your benefits early, you have already received four years’ worth of payments at $1,000 per month. It will take several years of higher payments to make up the difference. Your break-even age tells you when your benefits “break even.” In effect, it tells you at what age your cumulative benefits even out. In this example, your break-even age could be 75 years old before the higher benefit amount finally makes up the difference from starting your benefits early. We will provide more detailed examples later in this article.

How Does A Break-Even Calculator For Social Security Benefits Work?

If you are starting your retirement planning, you might wonder how a break-even calculator works. Once you understand how an SSA break-even calculator works, you will see that the calculation itself is not that complex. The calculator tracks your cumulative Social Security benefit based on different retirement ages, and it will tell you the age at which your cumulative benefit is the same. Starting your benefits early will lead to lower payments, but waiting until later will lead to higher payments. At some point in the future, the total amount of the larger payments will be more than the total amount of the smaller payments. The age at which these amounts cross each other is your break-even point, and that is what the break-even calculator will tell you.

Break-even calculators use a couple of pieces of information to calculate your break-even age. These calculators mostly use your monthly benefit amount, your birthdate, and a couple of options for the age at which you decide to take Social Security. However, there are several pieces of information that these calculators do not take into account. That information includes future cost-of-living adjustments from Social Security, inflation, spousal benefits that your spouse might be receiving, your life expectancy, the income tax that might be due on your benefits, and a few other factors. Therefore, the result of this calculation should never be the sole deciding factor on when to start your benefits.

Factors To Consider When Deciding When To Take Social Security

Calculating Social security benefits break even point.


Retirees who are deciding when to start their Social Security benefits should consider many factors, and it is generally a good idea to get help from a financial planner. While a break-even calculator can be one piece of information that you consider, there are several other pieces of information that should be taken into account as well. Here are some of the other things you should think about when deciding the best time to start your Social Security benefits.

— Life Expectancy

Your life expectancy should play a large role in the decision of when to start your benefits. Suppose you perform a break-even analysis, and the results show that you need to live to at least 85 years old to break even with your benefit payments. If your life expectancy is only 70 years old, then you probably want to go ahead and start your benefits as early as possible.

Likewise, you should consider your general health when making this decision. If you are in bad health or have a life-threatening disease, that can be a huge deciding factor when thinking about your Social Security benefits. You might also consider any survivor benefits that your surviving spouse or dependents may receive based on your work record.

— Spousal Benefits

Married couples must consider both the primary beneficiary’s benefits and their spouse’s benefit amount, especially if they are relying on spousal benefits. Break-even calculators do not consider spousal or survivor benefits when performing their calculations. You already know that your filing age will affect your benefit amount, but remember that it will also affect any survivor benefits that your surviving spouse might receive. If you start your benefits early, that decision could have a much longer effect than you originally thought when survivor benefits come into play. A financial advisor can help you perform thorough financial planning to consider all these factors when deciding when to start your benefits.

— Earned Income

Break-even calculators also do not consider any earned income that you might still be receiving from working as an employee or from self-employment. Remember that there is a trade-off to continuing to work after you start your Social Security benefits. If you have not yet reached full retirement age, your benefits will be reduced if you make more than the Social Security earnings limit. The reduction could be fairly significant, depending on your income. This could have a big effect on your break-even calculation, so make sure that you consider whether or not you will still be working after you start your benefits. Once you reach full retirement age, the earnings limit goes away, so working is no longer an issue.

— Personal Retirement Accounts

Make sure that you consider any personal retirement accounts you might have, such as an IRA, 401k, or annuity. Income from these accounts could help you delay the start of your Social Security benefits so that you can get closer to the maximum benefit amount. If you have no income from personal retirement accounts, you might be forced to start your benefits earlier. Thankfully, income from these accounts does not affect your monthly benefit payments because this income is not considered earned income. You can receive an unlimited amount of income from these types of sources with no effect on your Social Security benefit.

— Cost-Of-Living Adjustments

Remember that Social Security gives you an annual cost-of-living increase to account for inflation. By examining the consumer price index data, the Social Security Administration increases benefit payments to keep pace with inflation. During years when the price index shows a decrease in the price of goods, your Social Security benefits will not change. Some break-even calculators take the Social Security COLA into account when determining your break-even age, but they simply use an estimate of future COLA increases. Larger cost-of-living adjustments can shorten the time it takes to break even with your benefits because the higher your benefit amount, the larger the dollar amount of your benefit increase will be.

Social Security Break-Even Calculation Examples

To better understand the break-even calculation, let’s take a look at a couple of examples. Remember that these examples are for illustration purposes only, and your calculation will likely look different.

Consider an example where your primary insurance amount is $2,000 per month and your full retirement age is 66. You could start receiving your benefits at age 62 and receive $1,400 per month or wait until you are 70 and receive $2,600 per month. Here is what your cumulative benefits would look like ten years after you first became eligible for benefits.

  • $1,400 per month starting at age 62 – $168,000
  • $2,000 per month starting at age 66 – $96,000
  • $2,600 per month starting at age 70 – $62,400

You can see that at age 72, your cumulative benefits would be much higher if you started your benefits at age 62. But remember that the higher benefit amount will eventually cause your cumulative total at the older retirement age to surpass this amount. Here is what your benefits would look like after 20 years of Social Security eligibility.

  • $1,400 per month starting at age 62 – $336,000
  • $2,000 per month starting at age 66 – $336,000
  • $2,600 per month starting at age 70 – $374,400

In this example, you can see that at age 82, it makes no difference whether you started your benefits at age 62 or 66. Your cumulative benefit amount would be exactly the same. However, if you had waited until age 70 to start your benefits, you would have received a higher cumulative total already. So, if you expect to live into your 80s, it’s likely a good idea to wait to start your benefits in this example. Remember that your break-even age will differ depending on how much Social Security pays you each month.

Tips To Remember When Using A Break-Even Calculator

There are some important disclosures to remember when using a break-even calculator. First, you should remember that these calculations are only estimates. You can head over to and use the Social Security benefits calculator to get a pretty accurate estimate of your benefit amount at different retirement ages. You can then use those amounts in the break-even calculator, but even though they should be close, those numbers might not be 100% accurate.

Another thing to remember is that these calculators do not take into account all the information about your personal situation. There are other things to consider when deciding when to start your retirement benefits, like your life expectancy, general health, spousal benefits, and survivor benefit options. You might also need to consider your Medicare premiums if you are no longer covered by an employer-sponsored health plan.

Lastly, remember that you can always ask for help if you need it. Deciding when to start your Social Security benefits can be a complex decision, and experts can help you. Instead of relying on a break-even calculator, you can seek the help of a licensed financial planner. These experts can assess your overall financial situation and help you determine the best time to start your benefits. They can talk you through the different options and help you understand the pros and cons of different benefit start times.

The Bottom Line

A break-even calculator can help you decide the best time to start your Social Security benefits. These calculators will tell you when your cumulative Social Security benefits would break even based on different retirement ages. You could choose to start your benefits early and get lower payments or wait until later to start your benefits and get larger payments. These calculators can help you decide which option is right for your situation by showing you how long it will take for the cumulative amount of the larger payments to catch up with the smaller payments.

Remember that these calculators do not take several key pieces of information into account, like your life expectancy, health status, and potential spousal or survivor benefits. You must make sure that you consider all these factors before making the final decision on when to start Social Security. If you only use the break-even calculation, you might not make the best choice for your situation.


Frequently Asked Questions


Is it worth it to wait till 70 for Social Security?

There are a few different factors that must be considered when deciding whether it is worth it to wait until age 70 to take Social Security. The amount of your benefits is one factor, but your health and life expectancy are two of the most important. In most cases, you would need to live into your 80s to make it worth it to wait until 70 to start Social Security. If your life expectancy is shorter than average, then you should probably not wait until 70. It would likely make better financial sense for you to start your benefits early, as that would likely lead to a higher cumulative benefit amount.

How much do you need to save for Social Security?

Social Security does not really require any savings. Think about how Social Security works. Qualifying for Social Security requires you to pay Social Security taxes, which are mandatory. The taxes will be automatically withheld from your paycheck if you are an employee. You will pay these taxes when you file your tax returns if you are self-employed. The more you pay in Social Security taxes, the more you will receive in Social Security benefits. However, there is a maximum Social Security benefit amount and a Social Security tax limit. Once you reach the tax limit each year, no more Social Security taxes are due in that year. If you reach the limit each year for 35 years and wait until you are 70 to start receiving benefits, you will qualify for the maximum Social Security amount. However, the average Social Security payment is much less than the maximum.

How do I figure out my break-even point for Social Security?

The easiest way to figure out your break-even point for Social Security is by using our break-even calculator. Simply enter the required data, and the calculator will perform the calculations for you. However, you can also perform the calculation manually. To do so, you would need to calculate your cumulative Social Security benefits each year based on at least two different retirement ages. The year in which your cumulative benefits are equal represents your break-even point. Even though this calculation isn’t too hard, using our calculator is much faster and easier than doing it on your own.

What does break even with Social Security mean?

Break even means the point at which your cumulative benefits based on two different retirement ages would be the same. For instance, if you start receiving your benefits at age 62, your payment will be lower. Waiting until age 67 will result in a higher payment, but your break-even age might be 76 years old. That means you’d have to be 76 years old before the total amount you’d get from the higher benefit would be more than the total amount you’d get from the lower benefit. The break-even point is one factor to consider when deciding when to start your Social Security benefits.

What is the 85% rule for Social Security?

The 85% rule typically applies to the taxability of your Social Security benefits. No more than 85% of your benefits will ever be taxable, regardless of your income. So, you will receive 15% of your Social Security benefits tax-free, no matter how high your total income is. Depending on your income, you could see none of your benefits taxed. Similarly, you might see 50% of your benefits taxed. The taxability of your benefits depends on your total annual income.