Last Updated: April 5, 2010

How do you calculate whether it makes sense to take Social Security before full retirement age, at full retirement age, or to delay taking Social Security until age 70? According to 2008 survey by Fidelity Investments, nearly half (45 percent) of Americans age 61 are planning to begin taking Social Security at the age of 62, the first year that eligible recipients can apply. The top reasons driving their decision to collect early are immediate financial needs and health and longevity concerns, according to Fidelity.

Of those who plan to begin drawing down at age 62, Fidelity noted that more than three quarters (77 percent) will use the funds to pay for basic living expenses, such as food, utility costs and mortgages. What's more, this group expects their Social Security payments to comprise as much as half (49 percent) of their total retirement income.

But collecting Social Security early, at age 62, may not make the most financial sense, according to experts. Indeed, your benefits are reduced a fraction of a percent for each month before your full retirement age, according to the Social Security Administration (SSA). And the reduction isn't insignificant. In fact, it could be reduced, depending on the year in which you were born, by up to 30 percent. To be fair, there are some advantages (if not obvious needs) to taking Social Security before full retirement age. "The advantage is that you collect benefits for a longer period of time," according to the SSA. "The disadvantage is your benefit is permanently reduced."

In general, experts suggest that older Americans begin taking Social Security benefits at full retirement age. Of course, if possible, they suggest taking advantage of something called "delayed retirement credits." For Americans born in 1943 or later, each year they delay the start of Social Security benefits beyond their full retirement age increases their benefits by eight percent. By delaying until age 70, individuals born from 1943 to 1954 can permanently increase their monthly benefits by 32 percent. The exact amount of the increase depends on how long you delay benefits, and gets larger until you reach age 70 — the maximum age for which delayed retirement credits are granted.

Find out if you will get the Social Security money you've been promised; learn proposed fixes to strengthen the current system and how you can encourage lawmakers to fix the problem.