Social Security only replaces about 40 percent of an average wage earner's income after retiring. To be certain, Americans will need much more than just Social Security to live a comfortable retirement. Careful consideration of your personal circumstances and Social Security rules can help to maximize your benefits from the federal program.

Your Social Security benefit is based on your work history. Assuming you have met the minimum requirements, you will have a choice of collecting reduced payments as early as age 62; full payments at full retirement age, which is between age 65 and 67; or increased payments, if you postpone disbursements to age 70. Basically, you have a choice to receive lower payments for a longer period of time or higher payments for a shorter period of time.

Deciding when to begin receiving Social Security payments should be coordinated with your overall retirement strategy. Among the most important considerations are:

Your health. If you have a serious illness or a family history of short life expectancies, beginning payments as soon as you are eligible may be optimal. But on average, life expectancies are increasing. According to the Social Security website, one in four 65-year-olds today will live past the age of 90, and one in 10 will live past age 95. If you are healthy, your retirement strategy should factor in longevity.

Your plans. If you are working and do not need extra income, you may be better off to delay Social Security payments. If a worker begins receiving benefits before full retirement age, benefits will be reduced by $1 for every $2 of earned income above the annual limit ($15,480 in 2014). After reaching FRA, individuals can receive full benefits with no limit on earnings, except that Social Security payments are subject to taxation if your income exceeds certain limits.

Your marital status. The decisions for couples are complicated by spousal and survivor benefits. For a couple with average life expectancy, Social Security benefits are usually maximized when the lower-earning spouse begins payments as soon as possible (as long as those payments would not be lost because of the earnings test referred to above) and the higher-earning spouse delays payments until age 70. This usually results in the highest level of current and future benefits, over both lifetimes. Additionally, there are cases when a couple is better off when one partner begins spousal or survivor benefits and then switches to benefits based on his or her own earnings record at age 70.

For singles, assuming average life expectancy and no earnings test, the value of payments is roughly the same regardless of what age payments begin. However, there are strategies available to singles who may want to hedge against a future change in circumstances.

The issues surrounding Social Security are complex and require a thorough analysis of your personal financial situation and the many nuances of the benefit's rules, including the increasingly popular file-and-suspend rules. The Social Security Administration provides numerous calculators and publications. Visit its website at It is helpful to work with your financial adviser, accountant or estate attorney to arrive at the best decision for your circumstances.

Susan Lione is an investment adviser with HTG Investment Advisors, an independent fee-only advisory firm in New Canaan. For more information, call 203-972-8262 or visit