Clarence is age 62. He is employed as a nurse at a local rehab center. Upon retirement, he expects his monthly Social Security check to be his main source of income. Should Clarence take retirement now, wait until he has reached full retirement at age 67, or delay taking benefits until age 70, when maximum monthly benefits are available?

The amount of monthly Social Security benefits depends upon the income earned over the years and the year of beginning to take benefits. Each year of delay in taking benefits will increase the amount by 7 to 8 percent, up to age 70. 

According to a study by United Income, an online investment management and financial planning company, the average person taking benefits early loses $111,000 over his or her lifetime.

A person with serious health issues, who has a history of smoking, or who is overweight may not have a life span which justifies postponing the taking of benefits until age 70. The first step Clarence should take in determining how long he will live is to assess, with the assistance of medical professionals, his health condition.

The next step he should take is to evaluate his family history regarding longevity.  The age his parents, grandparents and siblings have passed away may help in predicting the age to which he will live.

Suppose Clarence is entitled to $1,600 a month, if he retires now. If he waits until he is 70, his monthly benefit will increase by $384 a month.  If he dies at age 77, he will end up losing over $25,000 of lifetime benefits he would have received if he had taken benefits at age 67.

In fact, given those facts, Clarence would actually have benefited from taking the reduced benefit he could have received beginning at age 62, because he would end up with $9,600 more over his lifetime than he would if he had waited until 67 to file for initial benefits.

Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm handling probate of estates, wills, trusts and Medicaid planning in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.