A common question among retirees is: When to start taking Social Security payment? Should they start as soon as they retire, or wait for more money?
A general rule in finance is to take money as soon as you can get it (because the time value of money gives a higher value to money now than in the future). However, there can be two good reasons to delay payments:
First, if you expect your income to drop (maybe you have a note from the sale of property or a pension that ceases), you may benefit by a lower tax bracket in the future. Therefore, it might make sense to defer your Social Security income until then.
Second, there may be a benefit to a spouse. Say the husband has a pension that stops at his death. The couple's income with the pension is comfortable, and they don't need the Social Security income. The longer they wait to begin taking Social Security, the higher the benefit. By deferring the income, the surviving spouse gets a larger check when the husband dies. (Of course, this option must be offset against getting the benefits earlier, paying tax, and reinvesting the after tax amount)
If you or anyone you know has this dilemma, some financial figuring can determine the best time to begin taking Social Security payments. Return the enclosed coupon if you would like these calculations prepared.