Beneficiary
From the Social Security Administration's perspective, a beneficiary is the individual who will receive Social Security retirement benefits. We require the data listed below in order to estimate future Social Security retirement benefits, retirement savings, and retirement expenses. Note that the closer you are to retirement, the more accurate the estimates.
First Name
Beneficiary first name. Required.
Date of Birth
Beneficiary date of birth. Required to estimate beneficiary Social Security retirement benefits.
Gender
Beneficiary gender. Required to estimate beneficiary life expectancy.
Work Status
Beneficiary current work status. If beneficiary is not working but seeking employment, select "Working".
Annual Earnings History Source
The source of prior years' annual earnings information. You can either estimate using the beneficiary's most recent annual earnings or upload the beneficiary's Social Security statement. The statement can be obtained from the Social Security Administration's website. This information is used to estimate the beneficiary's Social Security retirement benefits.
Most Recent Earnings Amount
The amount of income before taxes subject to Social Security tax that the beneficiary earned in the most recent full year.
Most Recent Earnings Year
The most recent full year the beneficiary earned income. Usually, the year prior to the current year.
Social Security Stmt. File
Select a Social Security statement XML format file to upload. This file is available from the Social Security Administration's website. You will need to create a Social Security Account if you do not already have one. See our Frequently Asked Questions for details on accessing your current Social Security Statement.
Retirement Savings - Stock Investments
The current value of all stock, stock exchange trade funds (ETFs), stock mutual funds, and other public and private equity in your retirement savings.
Retirement Savings - Bond Investments
The current value of all bonds, bond exchange traded funds (ETFs), bond mutual funds, and other bond investments in your retirement savings.
Retirement Savings - Short Term Investments
The current value of all cash, savings accounts, certificates of deposit, money market funds, short-term US Treasury securities, and other short term investments in your retirement savings.
Retirement Savings - Other Investments
The current value of all other investments in your retirement savings. This would include commodities, real estate (but not your primary residence), and other non-standard investments.
Questions? See our Beneficiary Frequently Asked Questions
Analysis Assumptions
In order to estimate your future Social Security benefits, expenses, and retirement savings, we need estimates of future outcomes such as life expectancy, when you plan to stop working, the amount you plan to save each month for retirement, monthly retirement expenses in today's dollars, and other data related to your retirement. The values you choose for these future outcomes are your analysis assumptions.
- You can change your analysis assumptions to develop alternative Social Security retirement benefit start strategies.
- You can view our Assumption Sensitivity Analysis for any benefit start month. This analysis shows how total retirement income, expenses and savings differ for a range of assumption values.
Stop Work Month
The month/year the beneficiary expects to stop working.
Life Expectancy
The age the beneficiary expects to live to in years. We assume the beneficiary's end of life month is the month the beneficiary turns the age you specify.
Monthly Retirement Savings
The monthly contribution to the beneficiary's retirement savings while working.
Return on Retirement Savings
The average annual rate of return you expect the beneficiary to earn on retirement savings from today to the end of retirement.
Monthly Retirement Expenses
The beneficiary's monthly expected retirement expenses in today's dollars. We adjust future retirement expenses for inflation.
Benefit Cost of Living Adjustment
The average annual Social Security benefit cost of living adjustment (COLA) you expect in the future. The default value is based on the Social Security Administration's estimate. Learn more about COLAs at the Social Security Administration's website.
Benefit Cut Year *
Year you expect Social Security retirement benefit cut to start. This field is not required.
Benefit Cut *
The percentage cut to Social Security retirement benefits you expect in the future. This field is not required.
* The Social Security Benefit Cut Year and Percentage analysis assumptions are not required. For more information on the possibility of a future benefit cut, see the Social Security Administration's most recent annual report summary.
Questions? See our Analysis Assumption Frequently Asked Questions
Selecting a Social Security Retirement Benefit Start Month
Maximizing Retirement Income
Once you stop working, you will need to replace your work income with a combination of Social Security retirement benefits and withdrawals from retirement savings. This is your retirement income. You will want to have enough retirement income to cover your retirement expenses each month. If your retirement expenses exceed your retirement income you will end up with a retirement income deficit and need an additional source of income in the future; otherwise, you would have a retirement income surplus and be able to cover your retirement expenses. In our analysis model, your monthly retirement savings withdrawal is determined by the amount your monthly retirement expenses exceed your Social Security benefit. If your Social Security benefit exceeds your retirement expenses in a given month, the difference is added to your retirement savings.
Given the objective of covering retirement expenses with retirement income, you can maximize the likelihood of achieving this objective by maximizing your retirement income. Put another way, the greater your retirement income the more cushion you have should your expenses be greater than expected or an unforeseen need for income occurs during your retirement. To maximize your retirement income, you will need to find the Social Security retirement benefit start month that produces the maximum combined Social Security Benefits, retirement savings withdrawals and any end of retirement savings.
Maximizing Retirement Income and the Time Value of Money
One possible method to find the Social Security retirement benefit start month that produces maximum retirement income would be to simply total up estimated Social Security benefits, retirement savings withdrawals and any remaining retirement savings for each possible Social Security retirement benefit start month. The start month producing the greatest total retirement income would be the best choice. Makes sense, but this method does not take into account the fact that the timing of retirement income differs depending on which Social Security benefit start month you choose.
But why does the timing of retirement income matter? The reason is simple. A dollar received today is worth more than a dollar received in the future. If you receive one dollar today, you can invest it and earn interest on it - ending up with more than one dollar in the future. This idea represents the concept of the time value of money. It means, in order to determine the value of a dollar received in the future, we must take into account when we receive it and what we could earn by investing a dollar today to be received at the future date. We do this by "discounting" that future dollar back to today. We refer to the discounted amount as the present value of that dollar. Discounting means dividing the future dollar amount by a factor which includes the interest rate that could be earned by investing a dollar today.
The following example illustrates the time value of money and present value. Let's say you place $1 in a interest-bearing account at your bank and the account pays 10% interest per year. You would have $1.10 at the end of the year. So if someone offered to pay you $1.10 in one year if you loaned them an amount today, the most you would be willing to loan them today is $1. The reason for this is you could, alternatively, put the $1 in your bank account and receive $1.10 in one year.
Maximum Present Value Benefit Start Month
So rather than simply summing estimated retirement income amounts, we sum the present value of the estimated retirement income amounts, taking into account the time value of money. In our analysis model, we calculate, for each possible Social Security benefit start month, the present value of monthly Social Security benefits and retirement savings withdrawals as well as any amount remaining in your retirement savings at the end of your retirement. The benefit start month producing the greatest present value of retirement income is the maximum present value benefit start month.
Other Benefit Start Months
While the maximum present value benefit start month represents the month that will produce the maximum present value of retirement income, your personal circumstances may preclude selecting this start month. To help you find the benefit start month that works best for you, we also calculate the present value of retirement income produced by all other possible benefit start months. This allows you to compare retirement income for any set of start months.
Questions? See our Analysis Model Frequently Asked Questions
Analysis Assumption Sensitivity
Your analysis assumptions are predictions of unknown future outcomes and therefore subject to prediction error - the actual value of the assumption may differ from your estimated value. If the actual value of an assumption does differs from your estimated value, it means our analysis model's estimates for retirement income, expenses, and savings will differ from the actual amounts. For example, if your estimate of monthly retirement savings amount differs from your actual monthly savings, your monthly savings withdrawals will differ from our analysis model estimates. So it is important to understand how retirement income, expenses, and savings differ for different assumption values.
In our analysis model, we calculate the total retirement income, expenses, and end of retirement savings for each analysis assumption over a range of assumption values. We display these amounts graphically so you can see how different assumption values result in different retirement income, expense and savings amounts.
Questions? See our Analysis Assumption Sensitivity Frequently Asked Questions