"Many times, people just claim Social Security as soon as they can," said Melissa Smith, vice president and retirement market manager at Wells Fargo in Charlotte, N.C.
But just grabbing Social Security at age 62 can cost thousands of dollars in retirement if someone lives well into their 80s or 90s. If a single person dies at 80, some research indicates that it wouldn't make a difference if the person took benefits at 62 or waited for a higher monthly payout until 70.
But running the numbers can be more complex for married couples or those who live longer.
RETIREMENT LIVING: At what age should you start claiming Social Security?
So come Veterans Day there's a Social Security-related freebie that one can use before or after one of those free meals for vets at some restaurants on Monday.
The youngest Vietnam-era vets are approaching retirement years and can crunch numbers Monday at www.SocialSecurityforVeterans.com. You're not going to be asked your Social Security number here. But you'd first need to go to www.ssa.gov/mystatement, create a "My Social Security" account and find your primary insurance amount or PIA, the estimated monthly Social Security benefit due at your full retirement age.
The one-day-only freebie is sponsored by Wells Fargo. Partners include Kiplinger's and Social Security Solutions, which offers advice on Social Security retirement benefit claiming strategies.
The Social Security website at www.ssa.gov can be helpful in working through strategies, too.
Age 62 is the earliest one can claim retirement Social Security benefits but people can wait as long as age 70 to claim the maximum monthly benefit.
The full retirement age — which offers better monthly benefits than at 62 — would be 66 for those born between 1943 and 1954. Someone born! in 1960 or after must wait until age 67 for the full retirement age.
Folks born from 1955 through 1959 face a crazy quilt of full retirement ages. Someone born in 1955 must wait until age 66 and 2 months for a full retirement age.
"Social Security is filled with rules. It's complicated. It's overwhelming to people," said Robin Brewton, vice president of client services for Social Security Solutions in Overland Park, Kan.
NEW: USA TODAY's Retirement Section
If your full retirement age is 66, for example, there's a 25% reduction of your monthly payment if you claim benefits at age 62 instead of 66. The reduction is about 20% if claiming at age 63.
Wait until 70 and the monthly payout between 66 and 70 goes up 8% each year you wait to take benefits or 32% for waiting the full four years, Brewton said.
Monthly Social Security benefits are based on the highest 35 years of earnings. (To be eligible for Social Security, you'd have to have registered 40 quarters of earnings or 10 years.) If you only worked 30 years, you'd have five years of zeros that would lower your overall monthly benefit.
Tim Steffen, director of financial planning for Baird's private wealth management group in Milwaukee, said some people in their late 50s or early 60s ended up out of work during the recession and may have retired early.
"If (Social Security) is your only source of retirement income, taking it early is your only choice," Steffen said.
But some should reconsider if they can afford to stop working and retire.
One significant mistake some people make now, Steffen said, is signing up to receive Social Security benefits at 65, the age to sign up for Medicare.
"A generation ago, that might have been fine," Steffen said.
If you claim at 65 instead of 66, the monthly benefit is reduced by 6.67%.
But things get more complicated for married couples who can claim spousal benefits or those who are divorced who also might claim spousal benefits.
Waitin! g until a! ge of 66 allows some unique strategies for some couples, too.
For a couple who are about the same age, it may make sense to investigate a strategy called "file and suspend" at age 66.
Brewton's example: Take a fictional Roy and Mary. His full retirement benefit at 62 years old is $2,210 a month; Mary's is $891 at age 62.
But say Roy does not collect at 62 and files for benefits at full retirement age of 66 and quickly suspends his benefit payments. That would enable Mary to file for spousal-only benefits at 66 and collect half of Roy's full benefit or $1,105.
At age 70, Roy starts collecting benefits at the full $2,914 a month. Mary then will collect her own benefits at age 70 at $1,184 a month.
Brewton's numbers show an overall gain of more than $185,000 if Roy lives to 83 and Mary lives until age 92 in this example. The survivor benefit for Mary also goes up to $2,914 a month after Roy dies in this case.
Sure, who knows exactly how long anyone will live? But experts say it can pay to play around with some numbers. So Veterans Day could be as good a day as any to run those numbers.
Contact Susan Tompor: 313-222-8876 or stompor@freepress.com
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