The Best Social Security Formula

Julia Little  |  August 8, 2011

Couple on a beachThere's a lot of conflicting advice about when it's best to withdraw Social Security. Many older adults may immediately want to start dipping into their funds, particularly if they were hit hard by the recession, but that may not be the best strategy. Waiting until as late as possible - age 70.5 - is generally recommended if you want to receive the highest possible payments.

At a time when Social Security makes up anywhere from 20 to 83 percent of a retiree's income, it's important to find the best time to tap into these savings, according to MarketWatch. That's why a number of organizations like AARP are starting to launch tools that help people calculate the most cost-effective way to access their benefits.

In fact, AARP provides an interactive, online calculator that takes into account age, income, gender and projected benefit to better estimate when retirees should start to think about withdrawing.

A few reviews of the gadget have already come in. Financial planner Elaine Floyd told MarketWatch that the tool was "surprisingly accurate." Others criticized the fact that the calculator put such a strong emphasis on waiting as long as possible to use the funds.  

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