The Fifty-Five Workbook · one worksheet

Chapter 22: The Breakeven Question

The worksheets from Chapter 22 of Fifty-Five. Type your own numbers, or try an example from the book to see how each one works.

Worksheet 22.1: Your breakeven age

By Darin Weidauer, gerontologist and Registered Social Security Analyst. Independent, licensed insurance agent, NPN 18580338.

Before you start

These worksheets are educational. Every answer is an estimate from the figures you type, worked out in your browser. Nothing you enter is sent to us or stored. They are not tax, legal or investment advice, and they are not a recommendation. Darin Weidauer is not a CPA, attorney, financial planner or registered investment adviser. Have a tax professional check any large decision before you act on it.

Where a box is filled in for you, it holds a figure published by Medicare, Social Security or the IRS, and the source is shown under the worksheet. These figures change every year. Check the current one at the source and type it over ours before you rely on an answer.

Worksheet 22.1

Your breakeven age

The age when waiting catches up with claiming earlier, in total dollars collected.

The formula: Earlier benefit × Months between the two claiming ages = What you give up by waiting. Later benefit − Earlier benefit = What you gain each month by waiting. What you give up ÷ What you gain each month = Months to break even. Divide by 12 and add to the later claiming age.

The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.

The paper worksheet

Earlier benefit $__________ × Months between ______ = Given up $__________

Later benefit $__________ − Earlier benefit $__________ = Gained each month $__________

Given up $__________ ÷ Gained each month $__________ = ______ months ÷ 12 = ______ years

Later claiming age ______ + ______ years = Your breakeven age ______

Walk through it, step by step

Pick two claiming ages to compare. Write your benefit at each, from your Social Security statement or the Chapter 20 worksheet.
Count the months between the two ages.
Multiply the earlier benefit by those months. That's what waiting costs you in checks you never get.
Subtract the earlier benefit from the later one. That's what waiting adds each month.
Divide the first answer by the second. That's how many months of the bigger check it takes to make up the difference.
Divide by 12 for years, and add to the later age. That's your breakeven age.
To turn the decimal into months, multiply it by 12. For 78.67: 0.67 × 12 = 8 months.

Check your answer

At your breakeven age, the two totals should be about equal. Check it: for 62 vs. 67 at 78 and 8 months, claiming at 62 collects $1,680 × 200 months = $336,000, and claiming at 67 collects $2,400 × 140 months = $336,000. They match.
Your breakeven age must be later than both claiming ages.
If your full retirement age is 67, your answers should be close to 78.7, 80.4 and 82.5.

This worksheet uses only the numbers you type. It has no government figure built in.

Check it at the source

The official places to confirm any figure

These worksheets explain the arithmetic. The agencies below publish the rules and the current numbers, and they are the final word.

Medicare.govCosts, enrollment and coverage, from the federal Medicare program. Or call 1-800-MEDICARE.Social SecurityYour own benefit estimates, at ssa.gov/myaccount, and the rules for claiming.IRSTax brackets, retirement account rules and the publications these worksheets cite.HealthCare.govMarketplace coverage and the premium tax credit before 65.Your State Health Insurance Assistance ProgramFree Medicare counseling in every state from people who sell nothing.