Social Security

The today’s-dollar benefit you enter, how it is indexed forward, claiming-age rules in the Social Security calculators, benefit taxation, and the bridge analysis.

Social Security in the retirement projection

In the main Retirement Calculator, you enter your estimated Social Security benefit in Step 2, in today’s dollars — the figure SSA.gov shows for the claiming age you selected, before future cost-of-living adjustments (SSA displays a monthly amount; enter it × 12).

Because you enter the estimate for your chosen claiming age, the reduction for claiming early and the credit for delaying are already reflected in that number; the projection adds no further claiming-age adjustment. The engine pays nothing before your claiming age. From the claiming year onward it pays that benefit indexed for inflation continuously from today’s baseline — so a benefit you will not start for 20 years keeps its purchasing power — and keeps growing it every subsequent year as a cost-of-living-adjustment proxy.

A spouse’s benefit is modeled the same way, indexed from the spouse’s own current age and paid from the spouse’s own claiming age. The projection does not compute spousal or survivor benefits — you enter each person’s own benefit estimate.

Claiming age

The dedicated Social Security Claiming Calculator and Bridge Calculator do compute the claiming-age adjustment, using the SSA rules:

Full Retirement Age (FRA)

From the SSA birth-year table (Social Security Act §216(l)): 66 for those born 1954 or earlier, rising two months per birth year across 1955–1959, and 67 for those born 1960 or later. Claiming at FRA pays 100% of the computed benefit.

Claiming before FRA

A permanent reduction of 5/9 of 1% per month for the first 36 months early, then 5/12 of 1% per month beyond that — e.g. claiming at 62 with an FRA of 67 is a permanent 30% reduction.

Claiming after FRA

A delayed retirement credit of 2/3 of 1% per month (8% per year), which stops accruing at age 70. A benefit at 70 is roughly 124% of the FRA benefit.

Cost-of-living adjustments (COLA)

SmartRetireCalc does not use a separate COLA input. In the projection, Social Security grows at your scenario base inflation assumption (Assumptions) — both before your claiming age (indexing the today’s-dollar estimate forward) and after. A scenario variant that changes the base inflation assumption (the higher-inflation alternative, +1.5 percentage points) moves Social Security with it. The temporary inflation-spike stress test raises modeled spending only — it never touches Social Security.

Spousal treatment

The projection does not model SSA spousal or survivor benefits — you enter each person’s own benefit and claiming age.

The Bridge Calculator does model a spousal add-on: it pays whichever is higher, the spouse’s own worker benefit or their spousal benefit (SSA’s deemed-filing rule — never both, never a manual choice). The spousal amount tops out at 50% of the primary earner’s FRA benefit, uses a steeper early-claim reduction than a worker benefit (25/36 of 1% per month for the first 36 months early), and earns no delayed retirement credit past the spouse’s own FRA. It is a simplified model and does not attempt full lifetime spousal/survivor optimization.

Taxation of benefits

Part of your Social Security benefit is federally taxable once your combined (“provisional”) income — other income plus half your benefit — exceeds fixed thresholds: none is taxable below the first threshold, up to 50% between the thresholds, and up to 85% above the second. These §86 thresholds are not indexedunder current law, so the projection holds them fixed. See Taxes for the full deduction and bracket treatment. The taxable portion of the benefit — never the full benefit — is what flows into IRMAA MAGI (Medicare & IRMAA).

Social Security Bridge

The Social Security Bridge Calculator answers a narrower question than the projection: if you retire before you start claiming, is it worth delaying your claim and drawing more from savings in the meantime, or claiming earlier and leaning less on your portfolio during the “bridge” years?

It runs a year-by-year simulation of your savings (Cash, Taxable, Pretax, Roth) for three claiming ages — Early, Full Retirement Age, and 70 — out to your selected life expectancy, and recommends whichever produces the highest total lifetime wealth. The Early column floors at your retirement age rather than always assuming 62, since you cannot claim before you retire in this model.

Each year’s spending shortfall (after Social Security income) is withdrawn in the same order as the main engine — Cash → Taxable → Pretax (grossed up for a single flat effective tax rate) → Roth — with Cash earning 0% and the other three accounts compounding at your selected expected return.

Limitations

• The projection takes your benefit estimate as given — it does not recompute it from an earnings history, and it applies no claiming-age math (you enter the amount for your chosen age).
• The projection models no spousal or survivor benefits; the Bridge models a simplified spousal add-on only.
• COLA is proxied by the plan inflation assumption, not by an independent Social Security COLA forecast.
• WEP/GPO, earnings-test reductions before FRA, and Medicare-premium deduction from the benefit check are not modeled.

Official sources

• Social Security Act §216(l) — Full Retirement Age by year of birth
• SSA — early-retirement reduction and delayed retirement credits — 5/9% and 5/12% per month early; 2/3% per month (8%/yr) delayed, ending at 70
• IRC §86 — combined-income thresholds for taxation of benefits (fixed, not indexed)
• SSA — deemed filing — the higher of a spouse's own or spousal benefit is paid