Early Social Security Retirement Advice for Pessimists and the Underemployed

I'm not an expert on Social Security. But I often hear financial advisors counseling people not to take early retirement at age 62. That's the conventional wisdom. But the conventional wisdom should not always be followed.

The following is a common example of conventional advice from a "Smart Money" article :

"....a top-earner retiring at 62 would get $1,803 a month. By waiting until 66, he'd increase that amount to $2,442, and delaying until 70 would bump the monthly payment to $3,256. Someone who delays taking Social Security until 66 rather 62 will collect more money over time if they live until at least age 77."

In the example, age 66 is what Social Security calls " normal retirement age, " which accounts for the higher unreduced benefit.

But waiting may not be desirable option for workers who are underemployed, unemployed, or working part-time,.

There are sound reasons for low earners with inadequate assets to take retirement benefits early. The Center for Disease Control and Prevention actuarial tables show that overall life expectancy is 77.9 years. Are you willing to bet your life on CDC actuarial tables?

The person in the " Smart Money " example would be giving up $86, 544.00 over the four year period from age 62 to 66. During the period from age 66 to age 77, the beneficiary would still be behind the financial curve.

For those considering early or delayed retirement, there are simple rules to follow:

Always schedule a pre-retirement interview with Social Security within three months of age 62. That will give a worker time to review their yearly earnings record for accuracy, and determine an actual early retirement payment amount.

SSA will also project an estimated delayed retirement monthly benefit amount. This will be based on estimated future earnings during the delayed period.

There are still people out there who do not realize they can earn $ 14,160 in 2011 and still receive all monthly benefits if they are less than full retirement age. At full retirement age, the annual earnings limit is $37,680.

A higher salary and job enjoyment is indeed good reason to postpone retirement, but if you're scraping by on a part-time or insufferable job you might be better off earning $14,160 per year, supplemented by monthly SSA retirement benefits. There are no earnings limits for working persons age 70 and older.