Dear Liz: Which is really better? A smaller Social Security check starting at age 62 that you are still young enough to enjoy for years? Or a much larger Social Security check beginning at 70 that you get for a much shorter period, and then just gets signed over to the nursing home or assisted living facility where you wind up? I won’t be dependent on the money, so I’m inclined to vote to get less earlier. Your thoughts? None of the usual discussion addresses the “quality of life” aspect of Social Security checks.
Answer: You’re right. The math typically favors delaying Social Security payments for as long as you can. Your benefit gets bigger for every year you delay until age 70. Also, your benefits are sharply reduced if you continue to work after taking early Social Security checks.
But this is yet another area where there are no one-size-fits-all solutions. Some people may opt to apply for benefits early, perhaps because their life expectancies are short, they want to let their investments continue to grow tax-deferred or they simply want (or need) the money. Others may delay for as long as possible to maximize their payouts.
You can’t know for sure in advance which is the right approach, since there are so many variables involved — including how long you’ll live and how long you’ll enjoy good health.
As you approach retirement, you should make an appointment with a fee-only financial planner to review every aspect of your retirement plans, including this particular issue. Another good resource is the awkwardly titled “Personal Finance for Seniors for Dummies” by Eric Tyson and Robert C. Carlson, who spend a fair amount of ink on the “when to retire” conundrum.