A reader asked whether it is better for her to start Social Security benefits at 62 or wait until age 66. The answer really depends on many factors, including her health, her family’s typical longevity and, well, whether she looks both ways when crossing the street! Seriously, though, according to the actuaries (the math scientists in the insurance business), taking your Social Security payments at age 62 or at the normal retirement age of 66, has no effect on the total that you’ll receive over your remaining lifetime. That’s a concept, however, that applies to millions of people as a group, not necessarily to you as an individual.

Let’s say you are born in 1950 and would have a normal Social Security benefit commencement age of 66 (for someone born from 1943 to 1954). Further, let’s say you would normally receive a monthly benefit of $2,000 at age 66, but you decide to take early commencement at age 62. According to the Social Security Administration website (www.socialsecurity.gov), you’ll get hit with a 25% reduction at age 62. This means that your benefit would be reduced to $1,500 per month at age 62. At some point in time, according to theory, the totals in each scenario will equal out. So, based on that theory, you decide to wait till age 66 and then apply for your benefit. Then, you decide to celebrate your decision and gleefully run out to Ben & Jerry’s for a nice big sundae. In your glee, you neglect to look both ways and don’t see the bus coming.

Total received: $0! Had you decided to take the age 62 benefit, you would have received $72,000!

As time passes, the difference becomes less significant. At age 70, you would have received $144,000 since age 62, vs. $96,000 since age 66. At around age 78 it balances out and having started payments at 62 looks less advantageous.

None of this, however, takes into consideration that you might not have earned a salary from 62 to 66, nor that you might have invested any of the proceeds.

Obviously, not a reality-based question!

I’ve heard the question often. It goes something like this: “I have $X of credit card debt, and while I want to be debt-free, I’m sure I could miss some great investment results if I throw all my money at my credit card debt!”

To me, if you look at the math, it doesn’t make any sense. If you invest in some common stock or common stock funds, you might grow by some percentage as time passes. While you are waiting for time to pass . . . Google these words:  “stocks plunge 2008 2009″. What appears as a result of that search should shake you back to reality! Fact is the market can be volatile. Hopefully, we won’t see the plunge that we witnessed in those years. Investing involves the risk that the same thing could happen — even as you are reading this!

The question behind the question, though, is more like, “Would I borrow money at 20% interest to invest in a market where I could very well lose that much and more?” When you make the choice to not pay down debt in order to use your money for another purpose, it is as if you are borrowing that money again! To be sure, it could go up by twice that rate, but if you’re reading this blog because the name fits you (baby boomer), can you afford this risk? Twenty, ten or maybe even five years ago, your answer might have been clouded by the distance to retirement, but now it should be clouded by the distance you could add to retirement!

Another point of view, to me, is this: What better investment is there where the investment result is guaranteed to be at least twenty percent? Think of it: by paying off a debt accumulating at 20% it is as if you have invested at that rate. A $10,000 debt right now will become $12,000 a year from now. So if you pay it off today, logically, you will have $2,000 more in your asset pocket a year from now.

So how do you accomplish such a feat — paying off debt? There are a few turkeys out their selling bogus software and books teaching you to “borrow your way out of debt” (my words, not theirs!), but there are also quite a few solid sources of wise advice. One of my favorites can be found at: http://www.daveramsey.com while another can be found at http://www.thesimpledollar.com

I frequently refer to each of these often when I discuss money with my friends. Where do you get your advice?

The first priority as you approach the next journey in your life . . . retirement . . . is to be sure you know the route. Most of us wouldn’t think of traveling into territory that’s unfamiliar to us without a map! You could follow the sun, westward, and find your way to California. And you could wind up on deadends, cul-de-sacs, roads “under construction”, etc., and perhaps land in San Diego or Spokane when you really wanted to arrive in Northern California. You will have wasted time, fuel and fires.

Instead, we should study a good map; a map that will help us visualize the continuity of our path. A companion to that map, might be a guide to hotels, motels and restaurants along the way — maybe even an auto club guide with information on the quality of not only the restaurants and lodging but even where the roads are “under construction”! In short, planning our trip will get us where we are going with the least outlay of time, and cash.

To approach retirement, is no less important, yet some of us arrive at the gates of retirement with no idea of how we got here and less of a clue as to what we are going to do now that we’re here!

Much of what you’ll read here, is about planning for retirement — whether you are in your forties, twenties or sixties! We’ll take a look together at the journey from the point of view of planning and mapping it out, financing the trip, packing the car, hitting the road and reaching our destination.