SOCIAL SECURITY PLANNING

Many people apply for Social Security retirement benefits when they become eligible at age 62, or soon after. For many, if not most, that's a costly mistake. Here's why:

• The amount you get increases sharply the longer you delay starting benefits. Someone who would get $17,200 a year starting at 62 could boost her benefit to $24,600 (43 percent more) at her full retirement age of 67 or to $30,500 (77 percent more) at age 70.
• Most people live beyond the projected break-even point -- where the amount they get from waiting exceeds what they would have collected by starting early.
• A premature start reduces survivor benefits that a widowed spouse may have to live on later in life.
• Starting early also precludes strategies that married people (and many once-married people) can use to boost their lifetime benefits

But waiting too long to begin benefits also can be a problem. People may not live as long as they think, which can result in money left on the table.

HOW LIFE EXPECTANCY FITS INTO IT - OFTEN, IT PAYS TO DELAY

The advantages of delaying are so great that many financial planners, recommend tapping other retirement funds such as 401(k)s and IRAs first if that allows someone to put off applying for benefits.

Unfortunately, many people unknowingly will lock themselves into lower payments for life because they don't understand the impact of starting early.

Receiving smaller checks for life is a big deal, since Social Security makes up so much of the income that people live on in retirement.

Let us help you understand all your options so that you can make an educated choice.