When to Take Social Security

You're 62 years old. The social security benefits you've awaited your entire career are finally within your reach. Biding your time for another five years may be more fiscally rewarding, as funds continue to accumulate in your account with each passing day. But can you wait? Not everyone can, and experts say, not everyone should.

Conrad S. Ciccotello, an associate professor and director of graduate personal financial planning programs in the Robinson College of Business at Georgia State University, says it's an issue of circumstance.

"People have, for decades, argued about whether you should take social security early or wait, and the good decision is one based on an understanding of the person's total financial situation," Ciccotello says. "What is it you're trying to do at this time in your life? How much financial freedom have you accrued? What other sources of income streams do you have? Look at the bigger picture."

There are some general rules to follow when tackling this dilemma, Ciccotello says. If you're not well health-wise and not expecting to live much longer than 62, take your benefits as soon as possible. Conversely, if you're still running marathons and all of your relatives have lived to be 100, it's probably wiser to wait until the normal retirement age of 67. Your marital status may also influence your decision. If you have a working spouse, determine which one of you has a higher social security payout, and let the more profitable earner hang onto the benefits for a longer period.

"Is it better to get $100 a month at 62 or $120 a month at 67? It's a judgment call," Ciccotello says. "If you're someone who can earn a higher rate of return on your money in the stock market, you'd be better off taking social security earlier, because you might be able to invest it yourself and make more money elsewhere."

According to the U.S. Social Security Administration, nearly 80-million baby boomers could apply for social security benefits at age 62 during the next two decades. If you were born between the years 1943 and 1954, however, you cannot receive full benefits until you hit age 67. Though you may start collecting social security as early as 62, your monthly check will be reduced by 25 percent for the rest of your life. To figure out how the reduction will affect your case, use the online calculator on the U.S. Social Security Administration Web site to estimate your individual benefits.

"There's a feeling of relief people get at 62 from starting to get social security benefits. People want to collect this cash because it makes them feel like they've taken a substantial step toward financial freedom," Ciccotello says. "I think people have a tongue-in-cheek perspective that anybody taking social security early must be a fool, but for some people, it's by far the most practical option."

And if you're unable to make the determination on your own, Ciccotello says, hire a financial or life planner to handle the legwork.

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