Concerned about Social Security Benefit reductions? Calculators can predict how changes could impact people

Many retirees rely heavily on Social Security as a source of income, according to CNBC report.

However, a lot of individuals are uncertain about how much money the program will likely still offer.

According to a recent poll by Nationwide Retirement Institute, 70% of consumers from all generations are concerned that Social Security would be exhausted during their lifetime.

An updated depletion date of 2035 was predicted in the annual report of the Social Security trustees. By that time, 80% of payments will be payable, assuming that Congress does nothing in the intervening years.

Using a reliable Social Security calculator can help you determine how much their retirement benefits might be decreased.

Measure Effects of a Benefit Cut

The most current forecasts from the Social Security trustees are now reflected in the calculator from Covisum, a provider of Social Security claiming software. Both a simpler, premium version for financial advisers and a free version for consumers are available.

Customers can assess which claiming approach could be the most suitable for them by using the $40 yearly charge product Maximize My Social Security. A different version is also available for financial advisers.

People can quickly calculate their benefits based on their own benefits and a few important details, such as their year of birth, the amount of their full retirement age benefit, the percentage of the benefit cut, and the year the benefit cut takes place, using the free Covisum calculator.

So, for instance, a person reaching full retirement age this year can compute the impact of both a 23% drop in benefits beginning in 2034 and the impact of no benefit reduction. 

The calculator will provide the value of making a claim at either age 65 or age 70 for each scenario, as well as the age at which recipients stand to benefit the most from the program. 

The value of delaying payments until age 70 increases as recipients live longer, as shown by the calculated difference in total benefits.

Free Calculator

But according to Joe Elsasser, the founder and CEO of Covisum, the free calculator is merely a beginning point when it comes to gaining a feel of the trade-offs when applying for Social Security.

Since there are hundreds of Social Security claiming regulations, a more thorough study will help you determine how to make the most of the program in your particular circumstance.

For instance, Elsasser underlined that married couples should actually coordinate their benefit selections.

Couples should decide jointly since after the first death, the higher advantage persists while the lesser benefit disappears, according to Elsasser.