The money’s there, but when do I take it?

To delay or not to delay? That is the question.

At least that’s the question a lot of baby boomers are asking themselves and their financial advisors these days as they try to decide when to begin taking their Social Security benefits.

Anyone who has paid into Social Security over the years can begin to receive those benefits in their 62nd year. But triggering the payments at 62 means accepting a lower monthly amount than one would receive at the “full” retirement age of 66. Then again, by waiting until age 70 to dip into the Social Security pot, you can expect an even higher monthly amount.

Today, Social Security represents a much more important revenue stream to retirees than it did for previous generations. As Josh Miller, president of Loveland-based Colorado Financial Management Inc., notes, “In the 1990s, people were confident that they could count on their stock market portfolio or their 401(k) or IRAs to support them through retirement. Now, with the volatility in the financial markets, Social Security has become a more important decision.”

Many factors must be weighed in the making of this decision. It’s a personal choice, Miller says, one in which current financial needs must be balanced against life expectancy, one’s ability to continue to earn a living past age 62, spousal considerations and the availability of cash from other existing assets. A person receives an extra 8 percent boost in monthly payments per year of delay after 66, money that can be important if one lives to a ripe old age.

Bryan, a federal government employee who asked that his surname not be used, is facing this quandary. He is 66, is secure in his job and has made the decision not to take Social Security benefits until age 70, when he plans to retire. Although he is a former smoker who has also battled weight problems, he is generally in good health and has good health insurance. His wife is considerably younger than he is and has a good job. Income for the couple is not an issue.

Bryan has faith in his financial planner’s projected life expectancy for him of 82 and decided that, by waiting until 70 to begin taking benefits, he could better enjoy retirement thanks to the larger payout.

Yet a Social Security department employee recently told him that he should begin taking benefits now, while still working. “I did the math and believe his advice was off base. My calculations show that I would be losing $44,000 by starting benefits now,” Bryan says.

Colorado Financial’s Miller isn’t second-guessing that call. But he thinks Bryan could potentially forfeit some money by delaying.

“It’s a tougher decision at 66, when you’re still working,” he says. “The statistics show that you need to live longer than 14 years past when you begin to take the benefits for it to pay off. Otherwise, it doesn’t pay off, except for a spouse, who will then receive potentially higher payments after you die.”

Miller’s advice: Visit your local Social Security office, get all the information you can about your accrued benefits, then schedule an appointment with a financial planner to help with your decision.

In the case of Bryan, he will have to make it to age 84 to enjoy his delayed payoff. Informed of this, he decided to check in again with his financial planner to make sure he has all the facts.

Setting up an online account with the Social Security Administration is a good way to determine your level of expected benefits at various ages and to gather other information that will help you in your decision-making process.

Start by going to https://secure.ssa.gov/RIL/SiView.do. There, you can create your personal Social Security account. Once you have created the account, you can click on “View estimated benefits” to see what you’d be receiving each month. To see a complete history of your Social Security-related income, click on “View earnings record.” This information serves as a good foundation as you approach this all-important decision.

The site offers an array of resources to help one evaluate one’s retirement financial needs and objectives and make the best decision possible about when to take benefits.

“There’s quite a bit of planning that can be done when all of the factors are considered and one’s personal goals are outlined,” Miller says. “Should you delay, or take it now? It all comes down to where you’re at in your life. Ultimately, only (you) can make that decision.”

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