The free, online tool is designed to help individuals decide what Social Security strategy may be suitable for their financial goals. The calculator not only estimates Social Security income, but also presents potential approaches for taking benefits based on the users’ goals and allows them to compare results of different Social Security strategies.
The calculator is an appropriate resource for singles who are evaluating benefits based on their own work history, married couples with no more than six years’ difference in age, and financial advisers who want to provide Social Security guidance to their clients. Retirement plan sponsors may also see the tool as an effective, no-cost resource for their participants.
Many Social Security recipients may not realize that they could potentially receive more income or cater that stream of income to their needs by choosing one strategy over another. The calculator aims to help them better understand these choices and think about them in context of their retirement income needs.
- The Social Security Benefits Evaluator prompts users to choose a goal for their Social Security income. Married couples can select one of seven goals, ranging from, "we want to maximize cumulative benefits as a couple" to "we want to minimize the drop in income for the surviving spouse." Singles can select one of three goals.
- After users provide some background information and choose a goal, the calculator offers a Social Security benefits strategy and estimates Social Security income based on the strategy.
- Income is shown as an annual cash flow, as well as a cumulative total to help users understand how the stream of income can be taken differently depending on their specific needs.
- Users can easily change their goals and compare how different strategies can generate different income streams throughout retirement.
- A glossary of more than 56 Social Security terms is provided in the right navigation pane of the tool to help users understand the jargon commonly used when discussing benefits.
T. Rowe Price will be continually evaluating opportunities to improve the calculator's capabilities and encourages users to provide feedback by accessing the "Feedback" link displayed after going through the tool.
"Many Social Security recipients may be leaving money on the table. We hope this tool begins to spark conversations about the choices preretirees are faced with when deciding when and how to claim benefits. People need to understand that the strategy they choose for taking their Social Security benefits needs to be based on their financial goals," said Christine Fahlund, senior financial planner with T. Rowe Price.
The calculator is available at troweprice.com/socialsecurity.