The last advice many people want to read is that you better think twice before grabbing their Social Security benefits at age 62.
But, quite honestly, some people would be far better off if they did think twice.
"It's very important not to tap into your retirement assets prematurely," said Steve Sass, associate director for research at the Center for Retirement Research at Boston College.
Retirees need to realize that they could boost their annual Social Security benefits by one-third if they collect Social Security benefits at age 66, instead of age 62.
It's the difference between taking a $1,125 check each month at 62 or a $1,500 check a month at 66. (This figure does not take into account annual inflation adjustments.) Workers could receive the same expected lifetime benefits regardless of when they claim, based on average life expectancies, according to the Center for Retirement Research.
Obviously if you wait to collect benefits at 66 and then die at 67, you would have collected less in total benefits than if you started collecting at 62.
Also, if you stop working long before age 62, you could see smaller Social Security benefits than if you had worked more years.
The huge risk, though, is what happens if you live well into your 80s and 90s -- and need more money for health care and other services? What do you do then?
If you claim at 66 and die at 93, you would collect more in total benefits than if you had started getting a Social Security retirement check at 62, Sass noted.
And nearly one-third of women and almost one-fifth of men will live into their 90s.
"I'd rather rely on a big Social Security check than a little one," said Christine Fahlund, a senior financial planner for T. Rowe Price.
When reviewing the spots where you can grab money in retirement -- say a pension, savings, a 401(k) plan -- you need to look at Social Security benefits as a rock-solid check in retirement. You've got that Social Security check whether the stock market goes up or down.
And Social Security checks retain their purchasing power, thanks to annual adjustments in benefits based on inflation. You don't get inflation-indexing with most pension plans.
Age 66 is considered the full retirement age, if you were born between 1943 and 1954.
The thinking is that if you take benefits at age 62, you should get a smaller amount because you'd be getting benefits four years or more ahead of your full retirement age. The thinking is based on an average lifespan.
So shouldn't things kind of even out?
For some folks, they would.
It's also important to know that Social Security uses your highest 35 years of income to come up with your average benefit. So if you stop working at age 53 and don't have 35 years of earnings, some years will end up at zero.
Given that people are living longer, Fahlund said delaying getting Social Security benefits for as long as possible may be a better strategy for many people.
Sass recommends that those who took buyouts in their 50s or early 60s need to think of themselves as middle-aged and find another job.
For those taking early retirement packages, it's best to understand as early as possible how those packages work in relation to Social Security benefits.
At Ford Motor Co., for example, early retirement packages for hourly and salary workers generally offer a bridge payment or extra money until the worker reaches age 62.
Once that retiree hits 62, the monthly payment from Ford is reduced on the assumption the worker would get Social Security benefits.
If retirees want to delay signing up for Social Security benefits until 66, they'd need to figure out how to live on reduced payments from Ford for a few years. It might mean tapping into savings in a 401(k) -- or getting more income from another job. Overall, to get the biggest Social Security check, you'd need to wait beyond the full retirement age until age 70.
If you wait until age 70, your benefits are nearly 75 percent more than if you took them at age 62.
Social Security benefit tips:
- See www.socialsecurity.gov/planners/calculators.htm to play with benefits estimates at various ages.
- Social Security recommends people apply for retirement benefits about three months before they want benefits to begin. But you may want to start getting information from a Social Security claims representative about six months in advance to understand your options.
-See www.socialsecurity.gov for information. Or call 800-772-1213 to apply by phone or set up an appointment.
Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at email@example.com.