NEW YORK – MetLife Inc. has launched a Web-based tool designed to help baby boomers calculate the best time to retire and take their Social Security benefits.
The insurance and financial services company says its Social Security Decision Tool is the first online program to combine life-expectancy tables with calculations of Social Security benefits in a simplified way and will allow consumers to maximize their benefits and income in retirement.
More than 80 million people are expected to reach retirement age over the next two decades, MetLife noted.
“Social Security plays a critical role in helping consumers create a steady stream of retirement income,” said Joseph W. Jordan, senior vice president of Individual Business Marketing at MetLife.
“It is effectively the largest social insurance program, which relies on a principle known as pooling: It uses the power of large numbers of participants to ensure income for all. Large insurance companies rely on the same principle to provide, as an example, guaranteed income through their annuity products.”
Taking into account age, gender, years of employment, income and average life expectancy, the patent-pending tool calculates the financial effects of starting Social Security at different ages in just three simple steps.
For example, a 50-year old woman who made $50,000 in her last full year of work could benefit significantly by waiting until age 66 to begin taking benefits. If she started receiving benefits at age 62, her monthly payment would be $1,087. The benefit increases to $1,584 per month if she waits until age 66, an increase of almost 50 percent.
And, because she has an 85 percent chance of living past her “break-even” age of 76 (the age at which the accumulated benefits of higher monthly payments begin to outweigh the benefits of starting Social Security), she will have received approximately $66,360 more in Social Security benefits by age 88, and $102,144 more by age 94.
“For two-thirds of older Americans, Social Security represents 50 percent or more of their income, and often serves as the foundation of their overall retirement strategy,” said Beth Hirschhorn, MetLife’s senior vice president of global brand and marketing services. “Unfortunately, a significant percentage of Americans are not maximizing their lifetime income Social Security benefit or making the most of what they have for retirement – due, in part, to a lack of understanding about their average life expectancy.”
Jordan said more than 70 percent of people reaching retirement age apply for Social Security benefits as soon as they’re eligible. “Yet individuals who take benefits before reaching their full retirement age run the risk of leaving money on the table – and, more importantly, potentially putting them at risk of outliving their assets,” he said. “They are not only impacting their financial security, but the security of their spouse and their dependents.”
MetLife Inc. (NYSE: MET) is a provider of insurance and financial services in the United States, Latin America, Europe and the Asia-Pacific region. Its Rhode Island-based MetLife Home & Auto division employs more than 2,000 people at its offices in Warwick. To learn more, visit www.metlife.com.
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