David McPherson of ABC News recently ran an editorial column wherein he discussed the “right” time to begin collecting Social Security benefits.  He was talking more about retirement benefits, and how waiting longer to apply for and receive such benefits may be in your best interest.   McPherson pointed out what most of us already know; that if you start collecting benefits at an earlier age, you lock yourself into less money per month, as opposed to waiting until you’re older in order to receive more money per month.

While that sounds good at face value, I’m afraid that his math simply doesn’t add up.  For example, McPherson correctly stated that at today’s rates, a retiree that begins collecting Social Security at age 62 only earns $19,665 per year, but if the same retiree waits until age 66 he or she will receive will receive $26,220 per year.

Sounds ok, right?  Wrong.

What McPherson fails to point out is the lost $80,000 total receivables between age 62 and age 66.  To make up the difference in earnings, the worker who retires later will have to wait until his or her 69th birthday to make up the deficit.

Clearly this may be ok for some, such as the retiree who fully expects to live a happy, active lifestyle until he or she is at least 80 years old.  As for me, I would recommend taking the money earlier and using it to my own benefit during the years in which I am fully able to make the most use of it.

On the other hand, if the retiree is otherwise financially able to live comfortably well without the supplemental earning of Social Security retirement benefits, and the retiree is in excellent health and fully expects to live an additional twenty years or more, then he or she may well consider waiting until a later age, so that the inheritance of his or her posterity may be increased.  If this paragraph describes you, then I say follow McPherson’s sound advice.

But as for me, I’ll take my money as soon as I can get it.