Social Security benefits: Five tips

Deciding when to start collecting Social Security retirement benefits is one of the most important financial decisions Americans face. Beginning too soon — or too late — can end up costing you tens of thousands of dollars, depending on how long you live. Some key things to consider:

• You can start receiving Social Security payments at age 62, but the amount will be reduced 25% to 30% from what it would be at your “full” retirement age. If you were born in 1960 or later, your full retirement age is 67. For those born from 1943 to 1959, it’s somewhere from age 66 to 66 years and 10 months. See https://www.ssa.gov/retire2/agereduction.htm.

•You may want to put off Social Security beyond your full retirement age. “You can get 32% more than your full benefit by waiting until you’re 70 to begin collecting,” author Jonathan Peterson wrote in “Social Security for Dummies.” There’s no reason, though, to wait beyond age 70 — your payments won’t increase.

•Estimate your benefits. You can get a personalized estimate of your Social Security benefits, based on your lifetime earnings, by setting up an online account at https://www.ssa.gov/mystatement. A simpler but less accurate option is to use the Social Security quick calculator at https://www.ssa.gov/OACT/quickcalc/.

•Get a ballpark idea of how long you’ll live by checking an online life expectancy calculator. “Also consider how old your parents lived to be and your personal health, including chronic conditions that may shorten your life span,” Peterson said. Generally, the longer you expect to live, the more delaying the start of retirement benefits makes sense.

•Remember other factors. Your Social Security benefit is only one part of your financial equation. Consider your pension, 401(k), savings and medical needs, and how long you plan to keep working. Also consider your spouse’s finances and the age when he or she will start receiving Social Security benefits.