Pick a date, any date, between your 62nd birthday and your 70th. Somewhere in there is the exact optimal moment for you to collect Social Security - but here is the maddening bit. There is no right answer. Of course there are right answers for specific individuals - but there is not one right answer for all.
The fact is that the most popular age to start collecting Social Security is the earliest - 62. About 48% of women take it then, and 42% of men do too. As for waiting until 70, only 4% of women do and 2% of men do, according to data from the Center for Retirement Research at Boston College.
In between there are reasons to rumble about which ages are optimal, but it's important to understand that there is no reason to wait beyond 70. No expert recommends doing it. But that's about the only thing experts fully agree on.
Why not just grab the money at the earliest opportunity? Take Social Security at 62, and there's an economic hit. The monthly check is 75% of the full retirement benefit which, for today's seniors, is at 66 (it is edging up to 67 and possibly beyond). Month by month, that payout increases so every month of delay adds to the haul. Start collecting at 63, for instance, and you get 80% of the full retirement age check. Wait until 64 and you get 86.7%. Wait until 70 and the bonus is that the check is bumped up to 132% of the full retirement benefit.
Do the math. A full retirement benefit of $1,000/monthly at 66 goes to $1,320 at 70 - or drops to $750 at 62.
Don't think that therefore the right age is obvious. Nor is it obvious that collecting at 62 is the wrong move.
Blogger Anna Renault said she began collecting in 2012 at age 62, and she is convinced that was the smart move. In 2009 she had been diagnosed with breast cancer. She added: "I had had other cancers, I really wasn't sure that breast cancer would not come back in the other breast or that another cancer wouldn't hit me." She added: "Will I see 70? The odds are against me, but I do believe in miracles!"
But she also wanted the reality of Social Security money in her hands every month, so she grabbed hers at the first chance.
Pretty much every expert agrees that when a person's health is questionable, it's best to take the money early.
Ohio financial advisor Scott Haley at Prelude Financial said he asks clients about family longevity when deciding when to collect Social Security. If a person's parents died in their 60s or earlier of natural causes, that's a good reason to think about drawing early. If a person's parents are still alive in their 90s, that's a reason to delay.
Dr. Nathan Oestreich, a San Diego State University accounting professor, added that calculations he has done suggest that delaying to 70 is smart if a person expects to live to about 81.
Don't think 81 is probable? Look at collecting your funds sooner.
How soon? Another, big factor in the decision: is the money necessary? Many seniors collect at 62, because they lack meaningful savings, don't have a pension, don't have a full-time job and need the Social Security check to pay rent, buy food, and pay for health care. There's no arguing with that necessity.
That need is underlined by research from the Center on Budget and Policy Priorities that said for 24% of Social Security recipients, it is their only income. If there's no other money coming in at 62, collect Social Security.
But another wrinkle - for those who collect before full retirement age - earnings above $15,720 reduce benefits by $1 for every $2 earned. Earn $2,000 above that and that is $,1000 subtracted from the Social Security payout. So for seniors who plan to work after 62, there are diminished returns that may make a clearcut argument for delaying collecting Social Security. If they are earning regular paychecks.
But after 66 - full retirement age - there are no penalties imposed on earnings. Why not take it at 66? Again, if health is a question or cashflow is anemic, go for it. But advisers agree: a senior in good health and without dire need for supplemental income is well advised to delay collecting Social Security until age 70. Every year of delay from 66 to 70 increases the benefit by 8%, and not many investments throw off that kind of sure and safe return.
So why do so few make it until 70 without drawing on Social Security funds? Experts point to lots of causes: health problems, involuntary retirement and money losing investments. And, of course, there's something irresistible about that money dangling before you: it's tempting to grab the Social Security payout.
If you can wait, do so. But if you can't, don't hesitate: grab the money with a smile.
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.