What is best timing for Social Security benefits?

It's time to take a break from our discussion of the real estate bubble to explore another favorite topic of readers.

No, not doughnuts. That's a favorite topic of mine.

Instead, let's look at a Social Security question submitted by a reader named Susan. She wrote that she is 61 and just retired, while her 66-year-old husband retired five years ago and has been receiving Social Security benefits since he was 62.

"We are hoping to defer my Social Security until age 66/67," Susan wrote. "We heard about my ability to take benefits, right now, against his Social Security (half of what he takes) but have been unsuccessful in finding any more about this. Would that be because this does not exist, or are we looking in the wrong place?"

That's an excellent question, Susan, and one I'm sure many seniors have pondered. For assistance, I contacted Mickie Douglas, public affairs specialist in Utah for the Social Security Administration.

Mickie wrote in an e-mailed response that, when a person files for benefits based on her spouse's earnings before reaching her full retirement age, Social Security also will determine if she is eligible for a retirement benefit based on her own work.

"If she is under full retirement age, Social Security rules say that she is 'deemed to have filed' for both her own benefit and the spouse's benefit," Mickie wrote. "If the benefits as a spouse are higher than the retirement benefits, you will get a combination of benefits equaling the higher spouse's benefit, but any retirement or spouse benefit paid before you reach full retirement age will be a reduced benefit."

Mickie also wrote that, if you've already reached your full retirement age when filing for benefits and are eligible for your spouse's benefits and your own benefit, you may choose to receive only your spouse's benefits and "continue accruing delayed retirement credits on your own Social Security record.

"You may then file for benefits at a later date and receive a higher monthly benefit based on the effect of delayed retirement benefits. Whether or not you have reached full retirement age when you file for benefits determines if you can defer filing for your own retirement benefit."

I had to read that last bit more than once, and slowly, to really take it in. But after I did, it made sense to me. Basically, you can take your benefits early, but if you delay, the benefits will be higher.