"My advice. Take the money," says Paul J. Mauro, CLU, ChFC founder of Legacy Financial Advisors (www.lfsadvisors.com) in Milford, MA.

Social Security reform has not gotten much traction. A simple fact remains - in addition to providing a modest level of retirement income, Social Security provides Americans with a safety net for the worst ills - such as income to help support a permanently disabled child or adult. Insuring for such contingencies, would be tough for those in their 20's and 30's whose monthly mortgage payments are higher than what their parents paid for their first new car.

Those in their 50s and 60s, who have been making Social Security payments since they started working at their first after-school job, simply want to collect the benefits.

The most common question they have is, "Should I retire early and accept lower Social Security payments at the first opportunity -- age 62-- or should I delay payments until I reach full retirement age?" Full retirement is 65 for those born before 1938 and goes up on a sliding scale to 66 or 67 depending upon the birth year and month.

Related questions include: "Should I continue working?" and, "How much will my spouse receive?"

Should I retire early? According to Paul J. Mauro, CLU, ChFC founder of Legacy Financial Advisors (www.lfsadvisors.com) in Milford, MA, "It depends on specific circumstances but, in general, the answer is 'Yes'. "

Average life expectancy in America is age 75 for men and 80 for women. The longer one delays the start of Social Security payments, the higher the payments will be, until they max out at age 70. For most of us, retiring later and collecting greater benefits for fewer years makes less sense than retiring as soon as possible and receiving lower benefit payments for more years.

Though the facts weigh in favor of taking the money now, it is still an individual decision. "Consider family history and personal health. If we come from a family with four living grandparents in their 90s, perhaps early retirement is not the right decision," notes Mauro.

If you were born in 1955, have earned the maximum subject to Social Security contributions - now $96,000 annually, and retire at the full retirement age of 66, monthly benefit will be $2,109. Begin accepting benefits at age 62, and the monthly check comes to $1,530. If, however, you were to delay retirement to 70 you would receive more benefits, about $2,825 a month.
   
Let's compare two people who were born in 1955 and live until age 80.
      
Retirement at 62 for18 years of benefits, lifetime benefits: $330,480.
Retirement at 66 for 14 years of benefits, lifetime benefits: $354.312.
   
For the 80 year old, waiting until full retirement means an extra $23,832 spread out over 14 years. If both retirees make it to age 78 instead of 80, the difference is $9,938. Says Mauro, "My advice. Take the money!"

What about working after retirement? It depends on earnings. Social security sets limits on how much one can work without having the monthly payments reduced. Those receiving benefits before full retirement age are allowed to earn up to $12,960 without penalty. Beyond $12,960, for every two dollars earned, Social Security takes away one dollar in benefits. Those who receive benefits at full retirement age may earn up to $34,440 without penalty. After that, Social Security deducts one dollar in benefits for every three dollars earned.
   
"For those who want to work some after retirement and do not expect to earn too much money, it makes sense to claim Social Security benefits as soon as possible," advises Mauro.
   
How much will my spouse receive?" Non-working spouses receive half of the working spouse's Social Security benefits, but only when the breadwinner starts to collect benefits. However, spouses who have their own social security account can apply for benefits when they reach the age of 62.

If the retired spouse receives, say, $400 per month at age 62 and the married partner retires later and receives monthly benefits of $1,200, the spouse who retired early would get an increase of $200 to equal $600 - half of $1,200

Concludes Mauro, "Social Security will not pay us enough to buy an island in the Pacific. However, knowing an extra twenty-thousand dollars or so is available at age 62 can be the tipping point when it comes to making a decision over whether to retire early or wait until age 66 or 67."    

The examples discussed above are hypothetical and for illustration purposes only. Tax laws are subject to change and individual situation may vary. Before making retirement or investments decisions consult a financial planner or wealth management professional who is versed in both insurance and investment products and a CPA or other qualified tax professional.

Legacy Financial Advisors, Inc. (www.lfsadvisors.com) has over 30 years of experience serving clients with wealth management services for retirement and estate planning. Headquartered in Milford, Massachusetts, Legacy has representatives throughout Eastern Massachusetts, Rhode Island, and on Cape Cod.

Securities offered through Legacy Financial Services, Inc. - Member NASD/SIPC. Advisory services through Legacy Advisory Services, Inc. Supervising Branch Office located at 321 Fortune Boulevard, Milford, MA 01757, (508) 482-9336

This information is for educational purposes only. Before you buy, sell, or act on any of this information, please meet with a financial advisor about your specific situation. Past performance is no guarantee of future results. Read the prospectus before you invest in any security. All information is gathered from sources believed to be accurate, however we do not warrant or guarantee their accuracy.