By Howard Rothman



)--While all of us have different ideas about what we're going to do when we retire, it's a safe bet that none of us is planning to struggle financially. Yet that is precisely what could happen despite our best intentions, especially if we're forced to exit the working world earlier than we anticipated.

Some serious thought about Social Security and the time and manner that we start our benefits, though, could make things easier down the road.

Alarmingly, two in three Millennials expect to retire by the age of 65, but almost 70% of them have yet to take any steps in planning or saving for it, according to a GfK survey conducted on behalf of MainStreet. Social Security, often viewed as an increasingly antiquated and insecure font of retirement income, has more Baby Boomers (85%) expecting it as a top source of planned retirement income than any other source. Even 54% of Millennials count SS as a top source of retirement income. Whereas Millennials more commonly cite employee-sponsored retirement savings plans (64%) and bank savings accounts, money markets and CD plans (63%) as a top source of retirement income, 65% and 61% of Boomers cited those sources, respectively, far below the expectations for Social Security.

The SS popularity may not fully come as a surprise. The decision on when to retire is based on many factors, but some of the most pivotal, particularly health issues and the loss of a job or job opportunities, are out of our control. Considering recent economic events, it's not surprising to learn recent studies by the Stanford Center of Longevity and Metlife Mature Marketing Institute indicate that the number of those who leave work involuntarily is growing. Or that this group now comprises the majority of all retirees.

One result has been more of us electing to take Social Security payments earlier than we should, with those out of the workforce routinely filing as soon as they can. Experts, though, insist this may be the wrong course of action. "As long as they are eligible, many Americans equate the date they retire with the date they file for Social Security," says Bill Meyer, co-founder of a private research and counseling firm called Social Security Solutions. "Instead, retirees should separate those decisions and look at Social Security as if it's another asset in their portfolio."

Most economists agree that delaying these payments, especially in the current era of low interest rates, may produce the most positive financial outcome. One reason is that applying for benefits before "full retirement age" -- which varies by birth year but is around 66 for most Baby Boomers -- will trigger early-filing benefit reductions that significantly cut available resources down the road when they might be more critical.

Because of these deductions, anyone in this group filing for Social Security at age 62 instead of 66 will receive only 75% of his potential maximum. If a person holds off, though, the government adds 8% to his monthly benefits every year he delays up to age 70 -- a healthy boost that also compounds significantly over time with the program's annual cost-of-living adjustments. "Where else are you going to get a guaranteed 8% gain every year?" Meyer asks.

If you are among those facing unexpected early retirement -- or those who have already left the workforce and perhaps started off on the wrong foot -- there are still remedies you can take that may aid your situation in the future. Here are four things you can you do if something unexpected happens and you find yourself retiring before you planned.

1. If you haven't yet filed for Social Security, find a way to delay at least until your full retirement age.

As noted above, if you hold off you get your full benefit amount and gain "delayed retirement credits." For those born in 1943 or later this amounts to an annual 8% gain until age 70, when the increases cease even if you continue to delay your benefits. So, in lieu of filing, try covering your expenses with other sources like part-time work, a spouse's income, or even by making withdrawals from your savings.

Many erroneously assume this latter tactic is always a wrong-headed move, but it might actually make the most financial sense even if you have just a modest nest egg. For example, Meyer says retirees with between $200,000 and $700,000 in tax-deferred retirement accounts could extend their portfolio's life by as much as a decade if they don't file until age 70. "People who have little savings tend to be the ones who take Social Security earlier," he says, "but they're often the ones who could benefit the most by a delay."

2. If you've already filed and the alternatives mentioned here sound feasible, consider suspending your benefits.

Even if you've started the ship sailing too soon, it might not be too late to reverse course. That's because Social Security offers an option called "voluntary suspension" that could give you a second chance.

Say you retired at 63 and filed immediately, but have recently been offered a good job and would like to go back to work. Or you've considered the above advice and feel that tapping into your savings makes more sense than losing out on that annual benefit increase. If you've reached full retirement age but are not yet 70, you can go back to Social Security and tell them you want to suspend your payments. From that point, you'll begin earning those yearly increases as if you never filed.

3. Go back to work and use the infamous "earnings test" to your advantage.

The Social Security retirement "earnings test" is applied to anyone below full retirement age who is collecting benefits and also earning a paycheck. If your earnings exceed a specific annually adjusted level, known as the "retirement earnings test exempt amount," the government withholds $1 of your benefits for every $2 to $3 you've earned. But it's important to recognize that these benefits are only held temporarily, and will be added back into your monthly benefit checks once you reach full retirement age.

Many see this as a penalty for working. But for those who have retired unexpectedly and started collecting early, it could actually provide a long-term advantage. How? By getting a part-time job that purposely exceeds the exempt amount, which is currently around $15,000, you can effectively trade benefits in the short-term for those in the future.

4. Absorb everything, run the numbers, and seek professional guidance.

Because it can have such a lasting and ultimately irreversible impact on our financial futures, the way we choose to handle Social Security may just be the most important decision we ever make. Nonetheless, it's believed fewer than 10% of all Americans have such a plan. Not a smart idea, Meyer says: "The difference between a good strategy and a bad strategy can mean hundreds of thousands of dollars."

Fortunately, all is not lost even if you've already retired before you planned -- or believe such a move may be in your future. Consider your situation carefully and run the numbers with help from one of the many websites or software programs available, both free and paid. Make sure you're using a credible source, and always follow up with independent professional advice if you have any questions.

--Written by Howard Rothman for MainStreet