Social Security Break-Even Calculator

How to calculate Social Security Break-Even Calculator?

This calculation finds the age at which cumulative benefits from two different claim ages are equal, helping you compare the lifetime value of each option.

Use the closed-form solution to solve for the break-even age: BE = (M1 × A1 − M2 × A2) / (M1 − M2), where M1 and M2 are monthly benefits and A1 and A2 are the corresponding claim ages.

Using the Social Security Break-Even Calculator calculator: an example

Example: compare claiming at age 62 with $1,400/month versus age 70 with $2,800/month.

Step-by-step calculation:

1. Set values: A1 = 62, M1 = 1400; A2 = 70, M2 = 2800.
2. Apply formula: BE = (1400 × 62 − 2800 × 70) / (1400 − 2800) = 78.0 years.
3. Interpretation: If you live past age 78, claiming at 70 yields higher cumulative benefits; if not, claiming at 62 yields more.
4. Compare this break-even age to your estimated life expectancy and consider taxes, spousal benefits, and other income needs.

Frequently Asked Questions

What does break-even age mean?

It is the age when total cumulative benefits from both claim ages are equal; earlier ages favor the earlier claim and later ages favor the later claim.

Does this account for inflation or cost-of-living adjustments?

The basic break-even formula compares nominal monthly amounts; include expected COLA or discounting separately to evaluate real purchasing power over time.

What if both monthly benefits are equal?

If M1 equals M2 there is no meaningful break-even age; choose the claim age based on cash-flow needs, health, and life expectancy.