Social Security: The 3 Most Revealing Charts About Your Benefits

Want to know more about Social Security? These three charts are a great place to start.

Aug 18, 2014 at 7:00AM


I've written dozens of articles about Social Security over the past year, and along the way I've created a large number of charts to illustrate one aspect of the topic or another. With this in mind, I thought it'd be interesting to share three of the more informative charts together in one place.

The first is probably one you've seen before. It illustrates the relationship between the size of your monthly benefits in relation to your primary insurance amount, and when you elect to take them.


Choosing to take them at age 62 (the earliest possible time) as opposed to 66 (the prevailing full retirement age), or even 70 (after which you no longer get credit for deferring), can make a big difference in your monthly check.

Because of early benefit reductions before 66, your actual benefits get progressively smaller the earlier you elect to receive them. On the flipside, every year you defer after reaching full retirement will boost your benefits by 8%.

The second figure expands on this by illustrating the cumulative surplus or deficit associated with taking benefits immediately after turning 62, as opposed to waiting until full retirement at 66.


In official retirement jargon, this is known as a breakeven analysis. Before turning 77, your cumulative benefits are greater if you begin receiving them at 62. This is because you've received checks -- albeit smaller ones -- for four more years than had you waited until your 66th birthday.

The relationship inverts once you turn 78. After that, the larger checks you get as a result of waiting outpace the smaller but more numerous checks associated with claiming benefits early. And as you can see, the extra money you receive by waiting until full retirement age rises quickly as time goes on.

Last but not least, the third figure shows the percentage of men and women who choose to claim Social Security benefits at age 62. Although it may not be obvious from the chart, this remains the most prevalent age at which retirees begin claiming benefits.


There are a variety of reasons for this. If people aren't optimistic about their life expectancy, then it's prudent to take benefits sooner rather than later. Additionally, if you're employed in a physically or emotionally demanding job, then applying for Social Security could be the best way to extract yourself from that environment.

Of course, at the end of the day, the decision of when to apply for benefits is deeply personal and based on your own particular set of facts and circumstances. Nevertheless, figures like these can help steer you in the best direction.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information