When should an older American start collecting Social Security retirement benefits? The question seems easy, but the answer is complicated.

Many individuals can begin receiving Social Security retirement benefits as early as age 62, before full retirement age. But the amount of their monthly payment is reduced -- the trade off for the longer period over which benefits are paid.

Older Americans can also choose to begin collecting full monthly payments at age 65, if they were born before 1938. For everyone else, the full retirement age is higher: if you were born between 1938 and 1959, your full retirement age goes up by percentages of years according to a Social Security age chart; and if you were born in 1960 or later, your full retirement age is 67.

Seniors may delay collecting their retirement benefits until age 70, thus qualifying for a delayed retirement credit. The amount of their monthly payments will go up as much as 8 percent for each year beyond the senior's full retirement age. (Unless the covered worker's spouse needs benefits to meet living expenses, most experts agree there's almost never any reason to wait until age 70 to take benefits.)

For example: Gladys turned 62 in 2003. She's eligible, based on her lifetime earnings, for a monthly benefit of $1,444. At her full retirement age of 65, her payment is $1,931 a month. If she delays her benefits until age 70, Gladys gets $2,697 a month (figures are supplied by the Social Security Administration; cost-of-living adjustments are added for 2004 and beyond.)

Because each option - early, full or delayed -- eventually pays out roughly equal total amounts, it may seem the easy choice is to take the money and run. Indeed, six in 10 retirees choose early benefits. (However, depending on when a person is born, the monthly payment will be 20 to 30 percent lower than what would have been received by waiting until full retirement age.)

For many seniors, the amount of monthly income they have to live on is crucial. Before deciding when to begin collecting Social Security retirement benefits, seniors should consider:

" What is my health like? While nobody can outlive Social Security benefits, taking them early may cause regret if an individual lives long enough. The better one's health and the longer one's life expectancy, the wiser it may be not to take benefits early.

" Do I have other investments? The money already held in retirement accounts can keep growing, tax deferred, for someone who can afford to live instead on Social Security benefits.

" Am I married? The needs of a retiree's spouse may be meaningful if he or she is much younger and likely to collect survivor's benefits for many years, and if he or she was not in the paid labor force: the working spouse's Social Security benefits could represent the lion's share of his or her retirement income. When an individual receiving retirement benefits dies, the surviving spouse receives the larger of two amounts - his or her own benefit, or a percentage of the deceased spouse's benefit (but not both).

" How long will I keep working? Employers often provide health care and other benefits that otherwise cost individuals plenty. For working seniors, collecting Social Security benefits early makes little sense, especially if they have earnings from multiple sources. That's because, until a working recipient reaches age 65, total Social Security retirement benefits are reduced, based on earnings above a ceiling that is adjusted each year.

When to opt for Social Security retirement benefits may be among the more important financial decisions an individual makes. Consulting with a reliable financial planner to learn the consequences of the various choices may be the wisest decision of all.