Making the Right Social Security Decision

As you move from your 50s into your 60s, you will likely need to make a choice about when to collect Social Security retirement benefits. Many people you know will fall back on the old adage "collect as soon as you can for as long as you can" and grab their benefits at age 62. However, in an age of increasing longevity and disappearing pensions, this may not be the most optimal, or even the most prudent, choice.

Did you know the most popular time to collect is not necessarily optimal?

Understanding all the rules behind Social Security retirement benefits can be a difficult, and daunting, task. Fortunately, you do not have to know every rule and exception to understand the key tradeoffs that impact you and your family. The optimal time to collect varies by individual and is dependent on the benefits to which you (and your spouse) are entitled, when you plan to stop working and what other assets and/or income streams you have. Following are a few easy steps to help you get started:

Step 1: Start With the Statement. Read and understand your Social Security statement. Assuming you are over age 60, you should receive a copy in the mail once a year about three months before your birthday. Can't track down your latest copy? Download it from the Social Security Administration's website at www.ssa.gov/mystatement.

Step 2: Don't Go It Alone. If you are married, be sure to track down a copy of your spouse's statement. One of the most common mistakes married couples make is to approach Social Security decision-making as two individuals rather than a related couple, potentially missing out on important (and financially meaningful) spousal and survivor benefits, perks for which you may be eligible simply because you are (or were) married. For more information on these benefits, please see Social Security Spousal Benefits: Another Reason to Appreciate Your Spouse and The Importance of Tackling Social Security Together: To Have, to Hold ... and to Collect.

Step 3: See the Big Picture. Social Security benefits should be one part of a broader retirement plan. As such, we recommend you discuss this decision with a financial professional as part of a comprehensive retirement planning program.