I am looking at retiring at age 65; my full Social Security retirement age is 66. I have savings of a guaranteed annuity and a 403b of $225,000. Should I apply for early Social Security at a decreased benefit or live on my savings the next year? – Lynda


We think your numbers are a little off. As you noted, your full retirement age is 66, however according to the Social Security website, if you were to begin benefits at age 65+1 month you would receive 93.9% of your full retirement – that would be closer to $1,600/month as opposed to $1,150. So, your first homework assignment is to go back and visit with the folks at Social Security and determine what the true numbers are.

With Social Security benefits of $19,000-$20,000 per year you’ll still have to make up the difference with around $10,000 per year from your savings. With a total nest egg of around $225,000 you may be cutting it a little close from the perspective of filling that gap for the next 25-30 years. If you’re healthy and up for it, maybe you could work for another year or two? This would allow your savings to continue to grow, your Social Security to increase, and ultimately give you a little more cushion as you move into retirement.