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For many Americans, traditional pensions are a thing of the past. Companies are cutting back on matching contributions to 401k(s). And most people have yet to recover all the investment losses suffered during the past couple of years.

Thank goodness for Social Security.

Of course, Social Security isn’t completely secure, either, given huge deficits projected for the fund. But it does make sense to factor a Social Security benefit into your long-term plan. For many people, the big question is: when should you start taking it?

Most financial advisers recommend postponing the start of benefits as long as possible in order to get a bigger monthly payment. But if you start earlier you’ll get benefits for longer, even though they’ll be smaller. If you live to be very old, you’ll collect more by waiting to get the larger benefit. If you don’t, it will pay to start earlier. For most people, the break-even point comes somewhere in their 70s or 80s.

According to the Social Security Administration, a person who will be entitled to a $1,000 monthly benefit at the “full retirement age” of 66 would get just $750 by starting benefits at 62. The benefit would increase to $1,320 if it didn’t start until age 70.

While that looks like a powerful reason for waiting, this person would collect $72,000 in the eight years from 62 to 70. It would take 10 ½ years, to age 80 ½, for the larger benefit from starting at 70 to make up that $72,000. In other words, if the recipient lived past 80 ½, waiting to start benefits at 70 would pay off.

For many people, the question boils down to whether they need the benefit in their 60s. For those who can afford to wait, there are some other factors to consider. If you start before full retirement age, your benefit may be reduced if you earn ordinary income. Also, your spouse may be entitled to a larger benefit after you die if you wait until full retirement age.

Finally, some people who don’t need the benefit in their 60s take it anyway, figuring they can build it up through investments. If you invested $750 a month at a 6% return, you’d have about $92,000 after eight years, according to the Savings, Taxes and Inflation Calculator. Starting early would then pay off unless you lived past 83 ½.

Deciding when to start benefits is tricky, and not to be left to the last minute. The Social Security Administration has a full explanation of the issues on its Web site. Also T. Rowe Price (Stock Quote: TROW) has a useful retirement-planning calculator that takes Social Security into account.

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