Social Security in the model

Adding Social Security (SS) benefits is optional in the app — check Include simplified SS estimate in the sidebar. When enabled, benefits are not assumed to begin at a fixed claiming age. The simulation decides when to claim based on whether you need the income for retirement readiness. The model decides when claiming improves your retirement plan. The claiming age emerges from the simulation rather than being entered as an assumption.

A simplified but realistic estimate

The model uses the Social Security Administration (SSA) Primary Insurance Amount (PIA) formula with a simplified Average Indexed Monthly Earnings (AIME):

• Career-average annual earnings (real dollars), capped at the taxable maximum
• Zero-fill to 35 years; requires at least 10 years worked (40 quarters) for eligibility
• 2026 bend points; Full Retirement Age = 67
• Claiming adjustments follow SSA monthly reduction and delayed retirement credit rules
• Benefits are real dollars — consistent with stock and bond returns
• Delayed credits stop at 70; benefits are flat from 70 to 72

You enter years worked and average annual earnings — no earnings history upload. The sidebar shows an illustrative monthly benefit if claimed at 67; actual claiming age may differ.

This is adequate for planning comparisons, not for filing a claim. Spousal benefits, WEP/GPO, taxation, and earnings tests are not modeled.

How Social Security affects the plan

Social Security behaves like two different things depending on claim status:

| Status | Counts toward Income Capacity? | Counts toward guaranteed income? |

| ------------------------ | -------------------------------------- | -------------------------------- |

| Unclaimed (age ≥ 62) | Yes — grows with claiming-age schedule | No |

| Claimed (locked) | Yes | Yes |

Before claiming, SS is like a known future income stream you have not turned on — it contributes to Income Capacity and helps determine retirement readiness. It is not counted as guaranteed income. Unclaimed SS is not simulated. The benefit schedule is fixed by SSA rules rather than simulated like stock returns.

After claiming, it is counted as guaranteed income, along with any existing bond ladder.

When the model claims

On each path, SS is claimed when all of the following hold:

• Age ≥ 62 and not yet claimed, and
• One of:

- Pre-retirement: Readiness would pass if SS were claimed but does not pass without it; or potential income already exceeds desired income but SR < SR₀ and claiming would bring SR ≥ SR₀

- Post-retirement: Current SR is below the post-retirement SR target glide

- Forced: Age 72 (modeling convention to ensure benefits are eventually claimed)

Important nuances:

• Claiming is not tied to portfolio retirement — you might claim SS at 64 while still working toward portfolio readiness, or claim after portfolio retirement if SR glide needs it.
• Forced claim at 72 is a modeling choice, not current SSA law.

Unlike most retirement calculators, this model does not require you to specify a Social Security claiming age. Instead, claiming is treated as a financial decision within the planner. In some market paths, claiming earlier improves retirement readiness by increasing guaranteed income. In others, delaying increases future benefits enough that waiting produces a more favorable outcome. The appropriate claiming age therefore emerges from your retirement plan and the simulated market outcomes, rather than being a fixed assumption.

Limitations worth knowing

• Simplified AIME from a single average wage, not year-by-year earnings
• No spouse, survivor, or divorced benefits
• No integration with Medicare premiums or benefit taxation

If SS is a small part of your plan, errors in the estimate matter less. If SS is most of your guaranteed floor, treat the output as directional and validate with SSA tools or a professional.

Estimated benefits should generally be within the right order of magnitude for planning purposes but should not be used to make claiming decisions without verifying them through the SSA.

Next: Reading your results — charts, tables, and metrics explained.