The Break-Even Age displayed in the Social Security section(s) of Income Lab shows the age at which total net-of-inflation benefits received after delaying claiming Social Security would equal or exceed total benefits received if they are taken as early as possible. "As early as possible" is either age 62 (if the client(s) are not yet 62) or as soon as possible if the client(s) are between 62 and 70.

For example, if someone is currently able to take $3,000/month at age 67 and is considering delaying benefits and taking $3,720/month at age 70, they would be giving up $3,000/month in income between age 67 and 70. So, at what point would the additional $720/month received from age 70 on equal those lost years of income? The answer is age 81 years and 7 months, as shown below.

Note that if you are applying an "Opportunity Cost" to this plan's Social Security break-even calculations, that discount rate would be applied to the break-even calculations. Opportunity Cost discounts the value of future benefits, making them less valuable than benefits received sooner. If there is no Opportunity Cost/discount rate applied, this break-even age simply answers the question, "If I delay taking Social Security, at what point would I have received at least as much as I would have received by taking it as soon as possible?"

For plans with two people receiving Social Security, breakeven dates and ages are calculated jointly. In other words, in order to calculate a break-even point, we compare:

• All benefits received, given that both clients claim as early as possible
• All benefits are received if clients claim on the selected dates

Because benefits in joint situations can be quite complex and include "own benefits", spousal benefits, and survivor benefits, it is best to include all joint benefits in these calculations. Because the break-even date is joint, it is the same for both clients. However, if clients are of different ages, the break-even ages would be different.