A study that came out last year reported that nearly 50% of everyone eligible to start taking Social Security at age 62 does so.

This is sad news since, for most people, this is not the wise decision.

Yes, it’s hard to resist. You’ve paid into the system for as long as you can remember, and now you can start collecting a check for the rest of your life just by asking for it. Why not take the money and run?

Well, what the other 50% of people realize is that if they wait, they get a better deal. People turning 62 this year were born in 1949, and their “normal retirement age” as defined for Social Security purposes is 66. This means that, in general, if you wait until age 66 to start collecting benefits, you get the full amount you have earned.

If you start collecting at age 62, though, the benefit you are paid, compared to if you were 66, is reduced 25%. So if you start collecting just four years ahead of time, you are giving one-fourth of your earned benefits back to the government. It’s almost as if you spent 10 out of 40 years paying into Social Security for nothing!

But not exactly. To be more precise, you are trading 25% of your potential total benefits in exchange for 4 years of relatively low payments where, if you wait until age 66, you will get no payments during those 4 years. Even so, this is usually not a good trade. If you live to normal life expectancy or beyond, the amount you gain by starting early falls way short of what you get by holding out for the higher benefit at the higher age (even taking into account that you could also earn interest on those early payments).

We are not talking here about whether you retire at (or before) age 62, only whether you start collecting benefits at that age. You can still retire by age 62 if you want to, but wait until age 66 to sign up for Social Security. And for that matter, you could do the opposite: start collecting at age 62 and continue to work (there are some penalties for that, but they are not as severe as they used to be). So the two events – retiring and signing up for Social Security – do not have to occur at the same time, or anywhere near the same time.

If you are working past age 62, you still have income you can live off of, so it rarely makes sense to sign up early for Social Security. If you are not working, or are not earning as much as you used to, you still should not sign up (in most cases), unless you just have no other sources of funds you can live on until age 66. If you have to use savings from a bank or an IRA or 401(k) account or other investments, or even if you can get a home equity loan at a decently low interest rate, it would generally be better in the long run to take advantage of those options, rather than start collecting Social Security benefits at age 62.

All the more so since there is a “gamble” here. Normally, you come out ahead taking Social Security at age 62 if you die younger than average (especially if you die much younger than average). And you come out ahead taking Social Security at age 66 (or even later, sometimes) if you live longer than average. So the gamble is how long you live, and the fact is that you could bet either way, and end up losing.

But the consequences of losing the gamble are usually smaller if you live long than if you die young.

Why? Because if you die relatively young, you probably aren’t losing anything much by spending some of your savings, or even using borrowed money, for four years – since dying young means you don’t need to think about stretching your resources into ripe old age. But if you die relatively old, and you chose to take a reduced benefit at age 62, you are stuck with 25% less income for the rest of a very long life, and this might well create a serious hardship eventually.

So unless you just have no financial flexibility at all to delay taking Social Security, you probably have more to gain than lose by waiting for a while, and usually to age 66.

What about waiting longer than age 66? This can make sense, too, because the government continues to reward you for delaying benefits, all the way up to age 70. After 70, there is no more reward, so there is never any point to waiting beyond age 70. But between 66 and 70, the reward for waiting is smaller than it is between ages 62 and 66, so much so that there is usually little value in it, unless you have reason to think that you will live much longer than most people, or you have a spouse who is likely to do so (since s/he will be able to receive your full benefit for life, after you are gone). This latter circumstance is especially applicable if you have been the principal breadwinner, and your spouse is quite a bit younger than you are.

Of course, if you are in ill health and you’re likely to die younger than most of your peers, taking the benefits sooner can make sense. So health and marital status are key considerations here.

So is the relative value of each spouse’s earned benefits. If your spouse dies before you do, and both of you were receiving Social Security retirement benefits, you are entitled to start receiving your spouse’s benefit instead of your own, if it’s higher. One implication is that if your spouse has a higher benefit but is in poor health, you might be better off taking a reduced benefit for yourself at age 62 based on your own earnings, then when your spouse dies, perhaps not many years down the road, you will still get his or her full benefit. So in this case, it’s your spouse’s life expectancy rather than your own that drives the decision.

As you can see, it can get complicated. And the arithmetic is not easy to do, especially if you also take into account the taxation of Social Security benefits, the effect of working while you collect benefits, and the fact that a dollar received sooner is higher than that of a dollar received later.

This is why software helping people make these decisions is important, and is becoming more readily available. Not all of the software is good however, so you have to be careful – or lucky, which is even better. But if you could truly rely on luck, then you wouldn’t need to think about these things at all!

 Chuck Yanikoski is a retirement adviser who lives and works in Harvard. For more about him, visit www.ChuckYRetirement.com.