Workers approaching the age of 62 have a choice to make with regard to Social Security: It is possible to take early retirement benefits and start collecting Social Security at age 62, rather than waiting for your full retirement age, which is 66 for people retiring now. However, taking early retirement means that your benefits will be 25 percent less than they would have been if you waited. In addition, you have the option of waiting until age 70, in which case your benefits will be 8 percent higher for each year after age 66 that you wait.

Financial experts say that it is better to wait if you can. The expected payout, based on average life expectancy, is much higher if you wait until full retirement age, and even higher if you wait until age 70. However, many people are not working at age 62, whether by choice or otherwise, and feel that they must take the benefits as soon as they can. In fact, about 45 percent of beneficiaries start taking Social Security retirement benefits at age 62.

What happens if you take early retirement, but then your circumstances change, or you simply decide that you should have waited? You have options:

First, within 12 months of taking early retirement benefits, you have the option of repaying everything you have received, with interest, and withdrawing your Social Security application. This wipes the slate clean as if you had never claimed early retirement. You can only do this once.

Second, between the ages of 66 and 70, you have the option of suspending payments. This allows you to gain the extra 8 percent per year that you delay receiving payments.

Finally, you have the option of working longer, not only to earn more money to supplement your retirement fund, but also to earn higher benefits. Social Security payments are calculated using your 35 highest-earning years. If you did not work for at least 35 years, you will have some zeroes averaged into that equation. In this situation, working more will bring your payments up.

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