Social Security Optimization Insight - US

Voyant's Social Security Optimization Insight aims to calculate for advisers the optimal year for their clients to start receiving their Social Security benefits. Let's first break down the outputs. 

Looking at the example below we have a client who is expected to live until age 90 and the adviser would like to check if their plan of starting to receive Social Security benefits at age 67 is the most optimal. 


If your Social Security break-even age is 90 and you start taking your benefits at age 67, you are indeed following a strategy that could be considered financially advantageous.

Starting your benefits at 67 means you're waiting until full retirement age (assuming your full retirement age is indeed 67), which maximizes your monthly benefit amount. If your break-even age is 90, it means that by waiting until age 67 to start receiving benefits, you would need to live until at least age 90 to receive the same total benefits as if you had started claiming at an earlier age.

Therefore, if you anticipate living beyond age 90, waiting until age 67 to start taking Social Security benefits would result in a greater total payout over your lifetime compared to starting earlier. However, in the case that the client were to have a lower expected mortality age this would suggest to us that it would be advantageous for them to begin to draw on their Social Security benefits earlier.

Total amount received from Social Security = Total of all Future Value Social Security Received from Inputted starting age until inputted mortality.

Value of Investible Excess at 70 = Uses the % listed in the surplus investment account to create a phantom investment account where contributions of excess social security from the start age until 69 and growth at the inputted growth rate until 70

Social Security Break-Even Age = The age at which the phantom investment account starting at age 70 surpasses the account started at the inputted start age; using surplus contributions and the inputted Growth Rate. e.g. a Social Security break-even age of 90 means that the client would need to live to age 90 for the start age to be the most optimal.

See a demonstration below.