You only get one chance to choose how you want to receive your Social Security benefits. This decision is usually heavily based on how long you're alive, which, unfortunately, no one has yet figured out an algorithm for.
But now Social Security Solutions, an online calculator that launched last month, claims they've devised a way to determine "longevity risk." In simple terms, this means if you prepare your Social Security claiming strategy based on dying at age 70, the longevity risk feature will factor in how much more you could claim if you lived until 75.
"There might be times where you give up $100 in a year, but you can get another $50,000 if you live five years longer," said company founder William Meyer.
Although there are a number of Social Security calculators for free and for purchase, many don't recognize how personalized social security benefits claims can be, Meyer said.
"Seventy-five percent of Americans take their Social Security at the earliest possible time. And I contend that's because they have no idea the impact and the potential of working all the different rules and nuances to their personal situation," he said. "They just don't know there's a way for them to get more money out of the system."
He identified several different personal considerations, from spousal benefits to switching strategy, and said that there are 500,000 different possibilities when it comes to deciding which strategy to settle on.
"I think that the perception is that Social Security isn’t a lot of money and it isn’t an important decision," he said. "But when you add up all those monthly payments over someone’s retirement, it’s a lot of money and people should take decision very, very seriously."
If you want a copy of the calculator's recommendations, you can pay $19.95. If you want the report as well as access to the interactive online tool, which includes being able to compare different scenarios, you can pay $49.95. And if you want the report, interactive tool and the ability to call up the company's on-hand advisors to ask specific questions, you can pay $124.95.
These are all one-time payments, and although access expires after 90 days, Meyer said you can request to keep your access forever.
Given all the discussion about possible changes facing Social Security, it does make sense to have this tool ready to help calculate any changes you want to make to your strategy.
Meyer said they have designed the software so they can make updates on the fly, but for now he doesn't think anyone over 55 years old will be impacted by potential changes to Social Security.
To read more, you can check out the reviews that The New York Times wrote in a series on Social Security calculators.