When using the SS optimization routine, the optimal age for my spouse is 63 (dark green square). When I use the Sensitivities feature under the Analysis tab, this age is confirmed b/c raising her age above 63 results in lower Total Savings at the end of plan as displayed on the Sensitivities page (and across all years judging from the graph on that page).
However, if on the Income page I change my spouse's age at which to start collecting SS benefits to 67, I see a higher Total Savings at the end of plan on the Summary Tabular Projections page than when she starts collecting at 63. This is true whether I pick "effective" dollars or "absolute" dollars.
I have made sure to Update Active Analysis before playing with the Sensitivities. I suspect I am not clear on exactly what the objective function of the Social Security optimization routine is. The manual states on p. 142 that
The analysis PRC performs during this process is considerably more involved than just determining the start ages that result in the largest long-term income; it also examines the long-term effects of this income on the interest on your savings, taxes, and survivor scenarios to provide you with the best overall solution which, in turn, will enable you to maximize your standard of living.
Does this mean that Total Savings at the end of plan as displayed on the Tabular Projections Summary could correctly be lower with the optimal SS age as calculated by PRC?
And are the Total Savings displayed on the Sensitivities page different from the Total Savings displayed in the Tabular Projections Summary (even if the latter is in absolute dollars)?
Hope I have not missed something obvious!
Thanks
@malik182 When you set the SS start ages on the Income page to the optimum values calculated by the SS optimization algorithm, it should result in the maximum Total Savings at the end of the modeling period assuming that no other changes have been made anywhere in the model since the SS optimization was run. I just tested this on my system with the latest version of PRC2023 and it worked as expected. If you're not seeing this, you can email (mail@pralanaconsulting.com) me a representative export file and I'll be happy to investigate.
Stuart
I've completed my investigation on this and it's an unfortunate error in the tool tied strictly to the SS optimization process. Spousal benefits were not being recalculated using the "what-if" start age for the lower-earning spouse so that was distorting the optimum start age determination for the spouse. In malik182's case, the corrected version yields an optimum start age of 66 for the spouse vs. 63 with the prior version of the tool, and improves the final savings balance by about 1%. This is now corrected in v4.2 which was uploaded this morning, and Pralana's regression test suite has been improved to include this test case going forward.
Stuart
