When to Take Social Security Retirement Benefits?
Concerning when to take Social Security retirement benefits, the Boston College Center for Retirement Research has some research in their publications section that addresses this subject. In particular, see “SHOULD WE RAISE SOCIAL SECURITY’S EARLIEST ELIGIBILITY AGE” by Alicia H. Munnell, Kevin B. Meme, Natalia A. Jivan, and Kevin E. Cahill.
Munnell, et. al. state that payments are set to be “actuarially fair” with respect to taking benefits earlier than full retirement age, which ranges from 66 to 67 depending on your current age. Obviously, you can model the problem with a range of investment return assumptions that will seem to shift the decision one way or the other. But, if you start with the presumption that the payout model is set up to be neutral for the average person, then you need to determine how you in particular (and your spouse) might differ from the average.
Assuming that you do not absolutely need the money to live on, then you might make this timing decision on other factors. Some of the more important factors that comes to mind is relative health and history of longevity in the family. If you and/or your spouse are relatively more (less) healthy than your peer group in your early 60s (when you are first faced with this decision), you might choose to delay (accelerate) accepting Social Security payments. Similarly with family longevity. No matter what, it’s a crap shoot from the standpoints of health, longevity, investment returns, etc., because the future is fundamentally unpredictable.