Income Lab, a retirement planning software program, has launched a new Social Security Optimization tool to help advisors model different Social Security claiming strategies for their clients.
The tool is meant to address client concerns around:
• Longevity and mortality risk, helping advisors show clients what’s at stake if they do or don’t live until their 80s or 90s.
• Early retirement, allowing clients to decide whether it’s worth it to retire early and take slightly reduced benefits.
• The future of Social Security, in case new policies reduce benefits in the future.
The tool also provides visuals advisors can use when walking through the modeling of different scenarios with clients. It’s the first module available within Decision Lab, a new interactive scenario planning platform that integrates with Income Lab’s suite of retirement income tools.
“For years, the advice has been simple: wait as long as possible to claim Social Security,” said Johnny Poulsen, CEO of Income Lab. “But what’s optimal as a rule of thumb doesn’t always reflect the real goals or health considerations of clients. Our Social Security optimizer helps advisors model those trade-offs clearly, so clients can retire on their own terms, with confidence and without second-guessing their decision.”
“What’s optimal as a rule of thumb doesn’t always reflect the real goals or health considerations of clients.”
Johnny Poulsen, CEO of Income Lab
While most advisors have long recommended that clients wait to claim Social Security in order to maximize benefits, most people don’t do that. According to Social Security Administration data, about one in three Americans start claiming Social Security at age 62, and more than 60% of people claim before their full retirement age, which is 66 or 67 depending on birth year.
Only about 10% of workers wait until age 70 to claim their benefits. A study from the National Bureau of Economic Research found retirement benefits taken at age 70 are 76% higher than retirement benefits taken at 62.
But clients may need Social Security funds earlier than age 70 if they’re planning on retiring early, or they may want to claim early if they believe they may not live long enough to see the benefits of higher checks over time.
There are also concerns about Social Security benefits being cut in the future. The 2024 annual report of the Social Security and Medicare boards of trustees found that Social Security is only able to fund 100% of scheduled benefits through 2033. After that, the fund’s reserves will be depleted, and continuing program income will only be enough to pay 79% of scheduled benefits.
More than 75% of adults worry a great deal or a fair amount about Social Security, according to a March Gallup poll, a 13-year high.
“Clients are asking better questions—and expecting better answers,” said Justin Fitzpatrick, president of Income Lab. “They might have a real preference to claim before 70. And that could be based on worries about mortality or benefit cuts, or on a feeling that they would live with more confidence receiving that check every month. We built the optimizer to give advisors the tools to explore those real-life questions in real time.”
For those interested in learning more, Income Lab is holding a live launch webinar on June 10 at 1 pm ET to showcase the new Social Security Optimization tools within Decision Lab. Click here to register.
SEE ALSO:
• Social Security Solvency Clock Ticking as Wait Drags On for 2025 Trustees Report
• 2026 Social Security COLA Rises Modestly as Trump Signs Executive Order on Drug Prices
• Social Security Bill Proposes Changes in Terminology
Corey Dahl is assistant editor with PropertyCasualty360.com. Previously, Corey was the editor of Colorado Builder magazine andS enior Manager of Content Strategy & Development at Charles Schwab.