In light of the recent stock market decline, many workers will be delaying the day they retire. The value in their 401(k), profit-sharing or other retirement plans most certainly has dropped.

There may be another good reason to delay retirement, and it deals with Social Security. Let’s create a hypothetical case. Robert Johnson is 60. He has worked all his life and has contributed to Social Security nearly every year since he was 17.

The Social Security Administration says that if Robert retires at age 66 he will receive $1,000 per month for the rest of his life. If he were to retire at 62 and start drawing his Social Security benefits, he would receive about $750 per month. This is approximately a 25 percent reduction, or about 6 percent per year. This is a hefty difference.

Also, if Robert wants to keep working and delay receiving his Social Security benefits until he is age 70, his benefits will climb to about $1,320 per month. Again, this is an increase of about 8 percent per year delayed. This is a significant difference and, of course, the increase runs for life.

The folks at the Social Security Administration know what they are doing. The larger benefit will be paid out for a shorter time. And the lower benefit will be paid for a longer time.

An actuary is a person who is trained and skilled to make these estimates. Actuarially, if you live until you are 77 or 78, you will end up with about the same dollar amount regardless of which option you take.

They say that if you live past age 78, delaying the income until 66 or 67 will have paid off. If you die before 77, you made a bad choice to delay. So the big question is — how long are you going to live? The question is nearly impossible to answer.

Your current health may be the biggest factor in regards to longevity. Your family history is another huge factor. Of course, you must consider your immediate parents and grandparents. This may be difficult to determine, since health treatment has improved over the years. Fewer people are smoking now, and other factors like wars, epidemics and nutrition come into play.

So why do about two-thirds of all Social Security recipients start at age 62? It may be the “bird-in-the-hand” mentality. It is a guessing game at best to determine longevity, and a lot can be said for having it now.

Your decision may also be influenced by your marital status. If your spouse did not have the same earnings level as you, then his or her survivor benefit will be affected by your choice. Usually the survivor will continue to receive the highest payment to either spouse. Starting with the lower payment could cost a spouse a fortune if he or she lives a long time.

About one-third of Social Security recipients say they start the benefits early because they need the money. These respondents say that Social Security is their primary source of retirement income. Too bad, since FDR and his associates never considered that this would be the only source of income. It was supposed to be just a minimum. Savings, investments, and employer benefits were supposed to provide the remainder.

The ultimate decision belongs to you. It is not an easy one. It is complex and there are many factors affecting your choice. Choose carefully and wisely.

Notable Quote: “Entitlement spending on programs such as Medicare, Medicaid, and Social Security make up 54 percent of federal spending.” — Former Rep. Jim Ryun, R- Kansas.

Tom is a Registered Investment Adviser and Certified Financial Planner. He can be reached at 254-0155, suntrm@aol.com or 1030 Seminary St. Suite D, Napa.