Ask Larry

I hear a lot of people talk about when they'll break even if they claim Social Security earlier than 70. How do you calculate when you'll "breakeven"? Thanks, Terry

Hi Terry, we don't think a breakeven analysis is an appropriate way to make decisions about Social Security, which is basically insurance against outliving your other assets. When you buy fire or homeowners' insurance, you don't calculate how many fires you'd have to have to make the insurance worthwhile because you buy it to insure against a catastrophic event. In the case of Social Security, the catastrophic event is living longer than you guessed and not having adequate resources. Maximizing your Social Security helps prevent that. Thanks, John