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Thursday, July 19, 2018

Q: I am 64 years old and have just been laid off. Instead of looking for another job, I’ve decided to retire. But I am struggling so much with my Social Security choices, and I hope you can help.

I went to the Social Security office, and they presented me with some options. They suggested I take widow’s benefits — my husband died several years ago — of about $2,000 per month. Then they said that at age 66, I could switch to my own Social Security and get $2,400 per month. Or they said I could wait until age 70 and collect $2,900 per month. Another option would be to take my own retirement benefit now (foregoing any widow’s benefits) and get about $2,200 per month.

I really don’t need the money, and I come from a family of people who live into their 90s. I just don’t know what to do, and I’m worried sick that I’ll make the wrong decision. I feel like I’m stuck between a rock and a hard place! Can you help me?

A: You aren’t between a rock and a hard place. At least with respect to your Social Security decisions, you’re between a velvet glove and a soft pillow! So I think you should relax and not worry about this decision so much. Frankly, no matter what you choose to do, you’ll come out way ahead of what most people can expect to get from Social Security.

You could keep things simple and just start drawing your own retirement benefit now. A monthly stipend of $2,200 is a very high Social Security check. And for someone who doesn’t need the money, that’s a lot of icing on your retirement cake.

But if you want to maximize your Social Security “investment,” then you should go with one of the other plans presented by your local Social Security representative. You should take your widow’s benefits now and collect $2,000 per month. You could keep getting that rate and then at age 70 switch to your own retirement benefits, which would come with a delayed retirement bonus (for waiting until age 70 to start your own Social Security). That’s why you’d get $2,900 per month.

You could make the switch from widow’s benefits to your own retirement at age 66 at the lower $2,600-per-month rate. But because you’ve got good genes that should keep you alive into your 90s, you’re probably ahead to wait until 70 to make the switch.