SLEDGE: What’s the best age to retire to start benefits?

Q: What’s the best age to start receiving retirement benefits? I’ve heard it’s best to start at 62, but others say it’s better to wait and get the full amount. What’s the truth?

A: The truth is that there isn’t any time that’s best for everyone. It’s a choice that everyone has to make for themselves based on individual and family circumstances, such as your health, your spouse’s health, your family longevity, whether you plan to continue working, how much money you’re going to need, how much income you have from other sources and of course the amount of your Social Security benefit. A lot goes into deciding when to apply and what’s right for one person may very well not be the best choice for another.

It’s important to understand, though, that monthly benefit amounts can vary significantly depending on when you choose to have them begin. If your full retirement age is 66, for example and your unreduced benefit at 66 is $1,500 a month, which would be reduced by 25 percent at age 62, to $1,125. If you were to wait until age 70, on the other hand, the benefit would increase at the rate of 8 percent a year after age 66 to $1,980. The eight-year delay from 62 to 70 would result in this case in an additional $855 a month.

Financial advisors often counsel their clients to consider delaying entitlement to Social Security at least until full retirement age. They’re thinking of the long term and of the possibility that their clients are going to live longer than they think they are. According to the 2000 census, for example, the average American man who lives to age 65 will live to be about 81; the average woman, about 85. And about one out of every four 65-year-olds today will live past age 90. For many Americans, retirement is going to last longer than they may be expecting. It’s important, then, to choose an entitlement date that will provide enough income for that long term.

Another thing to keep in mind is that, if your spouse should become eligible for survivor’s benefits on your record, he or she will receive a reduced amount if you elect entitlement before your full retirement age. Reduced retirement benefits, in other words, means a reduced survivor benefit for your spouse. At the same time, if you wait until after your full retirement age to start your benefits, the resulting increase will also apply to the surviving spouse’s benefit on your record.

Finally, remember that once you reach your full retirement age, there’s no limit on how much you can earn and still receive your full Social Security benefit. Prior to full retirement age, though, there are definite limits. Early entitlement will therefore entail a reduced benefit at the same time that earned income will have to be held within strict limits. 

As you can see, there’s a lot that goes into this complex decision. The online benefits planners at http://www.socialsecurity.gov/planners can provide information specific to your situation that may help you decide.