By Martha M. Hamilton
Sunday, December 30, 2007; F01

Next year the first wave of baby boomers turns 62, making them eligible to claim Social Security benefits -- and many of them will.

The temptation seems hard to resist. In 2005, 53.3 percent of all women and 48.6 percent of men opted to take the money as soon as they could.

But should they?

The decision, it turns out, is complicated by both gender and marital status. Your timing can have a major bearing on your finances in retirement.

If a boomer grabs benefits at age 62, the Social Security check will be smaller than it would be later. But it's money in hand.

The Center for Retirement Research at Boston College has crunched the numbers. Its research shows that many single women do better to wait until age 70, while married women may want to claim benefits right away. Married men, meanwhile, may want to resist the temptation to take benefits early because waiting would provide their widows with more money in old age.

The reason that those who take early benefits get smaller checks is rather simple: Their benefits will be spread out over a longer period. If you start drawing benefits after what Social Security designates as the full retirement age for those born between 1943 and 1954, age 66, your payments will be higher to compensate for the reduced number of years you are expected to collect. In other words, at age 66, your monthly payments are based on 100 percent of your benefit. At age 62, they are based on 75 percent of your benefit. If you wait to start claiming benefits at age 70, your monthly payments are 32 percent higher than they would have been at age 66.

The payments are based on average life estimates, which means they're absolutely fair only if your life conforms to the actuarial estimates. Drop dead sooner, and you collect less. Live long and prosper.

Women tend to live longer than men, so they are more likely to beat the clock and benefit from higher payments taken later. And that's what single women should do if they can afford to. As with single men, however, how much past 62 they want to wait may be influenced by both family medical history and how long they expect to keep working.

For married women, the equation is more complicated. A married woman may choose whether to draw benefits based on her own earnings or her husband's. If the wife's earnings are lower than her husband's, she can start receiving benefits at age 62 based on those earnings. If she does, she won't be stuck with reduced benefits for life, as a single woman would, according to a paper by Alicia H. Munnell and Mauricio Soto of the Center for Retirement Research. That's because she may collect benefits based on her husband's earnings as a widow. When her husband dies, she qualifies for a survivor benefit equal to 100 percent of her husband's higher benefit.

For the best result, the husband has to do his part. That means he ought to postpone drawing his benefits.

"As many elderly widows have very low incomes, early claiming by married men is a major social problem," said researchers Steven A. Sass, Wei Sun and Anthony Webb of the Center for Retirement Research who produced a paper in October titled: "Why Do Married Men Claim Social Security Benefits So Early? Ignorance or Caddishness?"

The best formula for households on average, they found, was for the husband to claim at 66 and the wife at 62. For women who survive to an advanced age, a husband's holding off on benefits can mean the difference between poverty or not. The three researchers' paper cited an earlier study that showed widows aged 90 or older whose husbands had claimed payments at or past full retirement age had benefits in 1998 that were 19 percent above the poverty line. By contrast, women whose husbands claimed sooner had average benefits 1 percent below the poverty line.

One possible fix might be to require spousal consent for claiming benefits before full retirement age, the researchers suggest.

If you are a husband who has claimed early, there is a way to reverse that decision. You can formally withdraw your application, pay back the benefits received (but no interest) and reapply, according to Social Security's Mark Lassiter.

There is another Social Security issue facing a number of people these days: early retirement. What does early retirement do to your Social Security checks? In most cases, Lassiter said, you face a reduced amount. Social Security payments are based on the 35 highest-earning years in your career. For every year you work beyond that, you get to drop off one of the lower-earning years from early in your career when you were a bicycle messenger, or, even worse, a poorly paid reporter for a small newspaper.

Also, if you make more than the maximum amount credited for Social Security, your benefits could increase as the ceiling rises. This year, it's $97,500. Next year, the limit rises to $102,000. Maybe that's not an issue for most of us, but it would make a difference for some people.

Have you left a job and taken a lump sum instead of monthly pension payments? If so, and if you're willing to share your experience and what you did with the money in a future column, contacthamiltonm@washpost.com.