When Should You Collect Social Security?

Before full retirement age -- now between ages 62 and 66 -- the Social Security Administration awards an individual whichever benefit is higher. But upon reaching full retirement age, individuals can choose which to receive. This means married individuals can claim a spousal benefit at age 66 and then switch to their own retired worker benefit at a later date.

"This approach allows a worker to begin claiming one type of benefit while still building up delayed retirement credits, which will result in a higher benefit later," explains the paper, which was published in April. Its authors are Alicia M. Munnell, Alex Golub-Sass and Nadia Karamcheva.

Those likely to benefit most from this approach are husbands in two-earner couples. In most cases, the paper explains, the optimal strategy is for a wife to begin collecting Social Security at age 62 as the first step.

Spouses Benefit

The second step would have the husband claim the spousal benefit based on his wife's earnings when he turns 66.

Then, in a third step at age 69, he would claim a higher retired worker benefit due to the delayed retirement credits for waiting beyond age 66, and stop receiving the spousal benefit he had been collecting.

If the woman is the higher earner within the couple, the roles would be reversed.

The paper's authors explain that for this strategy to work the individuals must be married, at least one of them healthy enough delay claiming until 66 and both spouses must have an earnings history.

"The higher and the more equal the earnings records, the more to gain," the authors note.

This is only a quick summary of the "Claim Now, Claim More Later" strategy. I offer it only as example of why it's a good idea to learn more about how Social Security benefits work and to think carefully before you begin collecting.

To learn more, visit the Center for Retirement Research at http://crr.bc.edu/. Also, be sure to visit early and often the Social Security Administration Web site, www.socialsecurity.gov.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

David McPherson is founder and principal of Four Ponds Financial Planning in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at david@fourpondsfinancial.com.

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