As you approach retirement, and more specifically 62 years of age, you get to decide when to start collecting Social Security benefits — and when you start collecting affects how much you receive per month. It's crucial to pick a date that maximizes your benefit, especially if you're among the majority of retirees who rely on a pension or Social Security as a primary source of retirement income.

What Your Social Security Start Date Means

You're eligible to receive full Social Security benefits as soon as you hit full retirement age, which depends on the year you were born. (The Social Security Administration can tell you your full retirement age based on your birth year.) You can start collecting Social Security as soon as you turn 62, but every month you delay past that point increases your payment — at least until your benefits max out when you hit 70. Because your monthly payments won't grow after you turn 70, you should start collecting Social Security by then, no matter what.

The Social Security Administration estimates how your payments change depending on when you start collecting benefits. If your full retirement age is 66 and 8 months and you retire then, you'd receive $1,000 per month. If you started collecting Social Security at 62, you'd only receive $716 a month. But if you waited until 70, you'd receive $1,266 a month.

As you can see, there's a financial trade-off: If you start early, you receive more monthly payments, but they're smaller. If you delay, you receive fewer Social Security payments, but each one is larger. So how do you decide when to start collecting Social Security benefits?

Reasons You Might Want to Collect Early

You might want to start collecting earlier because you need the money as soon as possible to cover your retirement financial needs. Maybe you had to retire earlier than you'd expected to, and you need extra income to cover your bills. In this case, it could make sense to start collecting Social Security as soon as possible instead of going into debt or being unable to pay your bills.

Another reason to start early is if you don't expect to reach the average life expectancy, based on your family history or current health issues. In this case, you might be better off taking payments as soon as you can.

If you're married, your spouse's Social Security benefit might affect when you want to start collecting. Maybe they have a larger benefit because they earned a higher income or delayed collecting. If your spouse receives a larger payment, it might make sense for you to start collecting early. You'll both benefit from that extra income now, and if you outlive your spouse, you'll receive their Social Security benefit.

Reasons You Might Want to Delay

On the other hand, there are situations when it makes more sense to delay collecting Social Security benefits. If you're in excellent health and think you live long past the average life expectancy, you might want to delay collecting benefits. That way, you'll have more years of higher payments, and they'll continue for longer.

If you can cover your financial needs in retirement without Social Security, delaying your starting date might be a sound investment. Social Security is one of the few forms of retirement income that you can't outlive, so getting the max benefit should support your long-term finances.

Delaying makes even more sense if you're still working, because if you're collecting other types of income, you could owe taxes on your Social Security. And if you're married and expect to receive a larger Social Security benefit than your spouse, you might want to delay collecting yours. That way, you'd leave them a larger benefit if you died first, and they could start collecting early to increase your cash flow.

A Decision for Your Entire Retirement

Without a crystal ball, it's impossible to predict the exact age that will maximize how much you collect from Social Security. Still, by considering all the factors, you can increase the chances of setting up payments that best match your financial needs.

For help with this decision, meet with a financial advisor who specializes in retirement planning. They can help you crunch the numbers and determine when collecting Social Security makes the most sense for you.