Dear Savvy Senior: Are there any services you can recommend that help pre-retirees decide when to start drawing their social security benefits? My wife and I are still a few years away from retiring but want to carefully weigh all our options to make sure we get the most from our benefits. - Approaching Retire-ment
Dear Approaching: Deciding when to begin collecting your social security benefits could be one of the most important retirement-income decisions you'll make. The difference between a good decision and a poor one could cost you tens of thousands of dollars over your retirement, so doing your homework and weighing your options now is a very smart move.
What to consider
As you may already know, you can claim social security any time from age 62 to 70, but the longer you wait, the larger your monthly check. However, there are many other factors you need to take into account to help you make a good decision, such as your current financial needs, your health and family longevity, whether you plan to work in retirement, whether you have other retirement income sources, and if you're married, your spouse's situation.
You also need to understand the dizzying array of rules that can affect your social security benefits, and factor in the various strategies that can increase your benefits if you're married, divorced or widowed.
To help you compare all your options, there are a number of online tools and services that have sprung up in recent years that can help you make an informed decision.
To get started, your first step is to go to the Social Security Statement Web page (socialsecurity.gov/mystatement) and get your personalized statement that estimates what your retirement benefits will be at age 62, full retirement age (currently 66) or when you turn 70. These estimates are based on your yearly earnings that also are listed on your report.
Once you get your estimates for both you and your wife, there are several online tools you can turn to that can crunch hundreds of calculations to compare your benefits under various scenarios and different ages to help you figure out your optimum claiming strategy.
Two free sites are Analyze Now (analyzenow.com) which offers a robust decision-making tool called the "Strategic Social Security Planner," but requires Microsoft Excel to use it. And AARP's Social Security Benefits Calculator (aarp.org/socialsecuritybenefits), which is a less sophisticated tool, but very easy to use.
Or, if you don't mind spending a little money, there are higher-level services such as Social Security Choices (socialsecuritychoices.com) which provides a comprehensive customized report for only $30 to help single, married or widowed pre-retirees identify their best claiming strategy. Or Maximize My Social Security
(maximizemysocialsecurity.com), which charges $40 for its report, and takes into account the thousands of different factors and combinations to help you maximize your benefits.
If, however, you want or need more help, there are specialized firms and financial advisors that can advise you for a fee.
One of the best is Social Security Solutions (socialsecuritysolutions.com, 866-762-7526), which offers several levels of service including its "Premier Plus" plan that runs multiple calculations and comparisons, recommends a best course of action in a detailed report, and gives you a one-on-one session with a social security specialist over the phone to discuss the report and ask questions. The fee for this service is $125.
Premier Social Security Consulting (premiersocialsecurityconsulting.com, 800-518-0761) is another option that offers several consulting packages, ranging from $75 to $295.
Or, you can get help through a fee-only financial adviser who specializes in social security analysis and charges on an hourly basis. To find someone use the Garrett Planning Network (garrettplanningnetwork.com, 866-260-8400), which offers the services of 300 independent advisers nationwide. The cost for a Garrett advisor ranges between $150 and $300 per hour.
Jim Miller is a contributor to the NBC "Today" show and author of "The Savvy Senior" book. Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit