Should you start collecting Social Security immediately or hold out a few years for a bigger check?

Your decision boils down to two options:

1.Lower monthly payout for more years

2.Higher monthly payout for fewer years

Which is better for you?

Dollar-wise, if you wait until your normal retirement age (NRA) when you are eligible to collect your full retirement benefit, your payout will be about 30 percent larger than if you start collecting social security at age 62. At age 70, your monthly check will be even bigger. The NRA can differ from age 65 to age 67 depending on when you were born.

For example, Joe is 62 years old with a 20-year life expectancy. If he starts collecting at age 62, he will receive $1,799 a month. If he waits until his NRA of 66, he’ll increase his monthly paycheck by $500. If you simply multiply each annualized benefit by his life expectancy (20 years at age 62, and 16 years at age 66) he would be better off waiting, right?

Right! Unless he has special circumstances that would benefit from an immediate influx of cash. These numbers do not take into account real life expectancy, cost of living adjustments or opportunity cost.

Now, let’s talk about a few lesser-known Social Security planning opportunities:

Love Will Keep You Together . . . and Give you Higher Social Security Checks

It’s true! If you have been married for at least 10 years, you can collect benefits on your spouse’s record. What does that mean? You receive half of your spouse’s benefit if it is greater than your full benefit.

Here’s an example: John is eligible to receive $1,600 per month at age 62. His wife, Marlene, is only eligible to receive $660 per month. Social Security will compare their benefits and adjust Marlene’s to equal half of John’s — $800. And the adjustment does not take a bite out of John’s benefits.

Taking Turns

Here’s another great tip: When you and your spouse reach full retirement age, you can choose to collect on your spouse’s record (spousal benefit) and let your own benefit continue to grow. When you hit 70, you can start collecting your own, larger benefit (it had a time to grow).

Lastly, you aren’t stuck with these decisions. It’s OK to change your mind. Gary started collecting his Social Security benefits at age 62 to pay off some debt. Six months into it, he wishes he could reverse his decision. He can. Gary can return the benefits he has collected to Social Security and wait for a higher payout when he hits 70. And it’s INTEREST-FREE.

But there is a caveat. The Social Security Administration has recently tightened the rules about the interest-free loans. According to the new rules, you can change your mind and withdraw your application for retirement benefits within 12 months. You are also limited to one withdrawal per lifetime.

The bottom line with Social Security is individual circumstances will dictate your ultimate choice. Use the information in this article to make an informed decision and maximize your Social Security dollars.