When I receive my annual "estimated benefit report" from the Social Security Administration, it mainly serves to remind me how many decades of work I have in front of me before I reach retirement age.

Not a pleasant thought.

But for a reader named Joe, receiving the same report generated a practical question.

"Almost everyone's advice suggests to wait until full retirement age to take Social Security," Joe wrote in an e-mail. "My calculations suggest otherwise...Perhaps your advisers might be able to point out where I may be in error, but age 62 seems to make better financial sense than waiting to age 66.

"The analysis I made uses a simple savings calculator. At age 62, my payment would be $1,580 per month, and if I wait until 66, the payment would be $2,096 per month. I have created a retirement budget; therefore, Social Security would offset withdrawals from my IRA.

"Taking Social Security early looks as if I would be saving an equal amount each month in my IRA. Saving $1,580 per month for four years at 8 percent return equals $89,080. If I then take the $89,080 and invest it for 26 years (30 years total retirement) at the same 8 percent return, the value is $712,873. I then compared the additional $516 per month at age 66 and invested it for 26 years. At the same 8 percent, the value would be $540,258. The result is an increased value of $172,615 to take Social Security at age 62."

Joe wrote that this situation would seem to be the same for anyone who is living on a combination of savings and Social Security.

I think Joe makes an interesting point. For the expert advice he requested, I called Sharla Jessop and James Derrick at Salt Lake City-based Smedley Financial Services.

Sharla and James reviewed Joe's calculations and say their answer depends on a couple of assumptions.

Sharla says Joe's e-mail makes it appear that he is single. If that is the case, she says, it is smart for him to start taking Social Security benefits as soon as possible. Statistically, men have a shorter life expectancy than women, so he'll want to get as much out of the system as he can.

But if Joe is married, and if he makes more money than his wife, the situation changes.

"Statistically, his wife will outlive him," Sharla says. "Upon the death of the first spouse, the surviving spouse loses the lower Social Security benefit (of the two) and continues with the highest. So if he's married...he should hold off on taking Social Security benefits until the later date."

That way, James says, the monthly benefit to his wife when Joe dies would be higher.

Sharla also points out that, for a single woman, the situation changes again. Women have a longer life expectancy, so they are wise to put off taking Social Security benefits, allowing them to lock in a higher benefit for a longer period of time.

"Social Security is a very difficult system," Sharla says. "It has a lot of little rules that are hard to understand and interpret for your individual situation."

One other note, Joe. Both Sharla and James say it would not affect their answer to your question, but they recommend that you alter your expectation for an 8 percent return.

"We would tell people that using a lower rate of return of 5 or 6 percent is better strategy," Sharla says.

"The 8 percent is very realistic, but for planning, we try to be more conservative," James adds.

Based on the market's recent performance, being conservative sounds like a good idea!

If you have a financial question, send it to [email protected] or to the Deseret News, P.O. Box 1257, Salt Lake City, UT 84110.

E-mail: [email protected]