Go to the web with the question: "When should I begin drawing my Social Security benefits?" If you were uncertain of the answer before you began reading, you may be more confused afterward.

You’ll learn that in 2019 you can begin drawing "reduced" SS benefits at age 62, but that you can receive your "full benefit" at 65 — which is true or not true, depending on what you mean by "full" — and that your benefit amount keeps increasing every year you wait to begin drawing benefits until you’re 70, which is true.

You’ll be informed that there are a couple of different age-related sweet spots that are better than others to begin drawing benefits — which is possibly true, but a tricky way of looking at it — and you may also read that although by beginning to draw at age 62 you’ll "receive a permanently reduced benefit," you’ll still be ahead "if you live long enough to offset the reduction," which is just plain wrong.

Since the reduction is permanent it doesn’t matter how long you live — the longer you live, the farther you’ll fall behind because every year you continue to get less than if you’d waited.

There are many more online articles and differing opinions, not many clearly wrong, but that try to get your attention by presenting something you haven’t heard before that could apply In some limited circumstances -- while downplaying the obvious truth, which, actuarially speaking, is that it’s generally true that the longer you wait to begin drawing benefits, the better off you’ll be.

Full Benefits vs. Maximum Benefits

One of the confusions Americans may have about Social Security benefits has to do with the meaning of a "full benefit." Although Social Security benefit payments were first legislated in the original Social Security Act of 1935, it wasn’t until 1972 that the government began paying increased benefit amounts for citizens who wait additional years to begin drawing them.

The Social Security Administration calls these additional amounts "Delayed Retirement Credits," or DRCs. The administration, however, has retained the designation "full benefit" for the amount you’ll receive at age 65 (or 67, depending upon when you were born) even though there’s a greater amount available than a "full" benefit — a "maximum benefit" that you’ll receive only if you wait until you’re 70 to begin drawing them.

Unfortunately, the difference between a "full benefit" and the greater “maximum benefit” is muddied further online by financial writers who know better but sometimes refer to the "full benefit" as a maximum benefit! They’re not the same!

What’s in a Name — Politics?

To get clear on what’s going on here — and, importantly, why — let’s look at the benefit situation from the SSA’s point of view, but also as if what you’re doing when delaying or accelerating benefits is placing a bet.

Beginning in 1972, when the SSA first introduced DRCs, they also introduced the program of reduced benefits for early retirees. Although the SSA routinely explains these benefits in terms of the percentage reduction compared to a full benefit, a simpler way of looking at these payments before and after FRA is simply as a continuum that begins with the earliest possible retirement age, 62, and continues until age 70, with increased payments for every year you wait. There’s really nothing magical or even especially meaningful about the “full retirement age” designation at 65 except for one thing: The yearly payouts increase faster from the FRA year onward.

The SSA, incidentally, has been straightforward in stating how they’ve come to the current payoff rates — they’re increasing the benefits at a faster rate after 65 because they want to encourage retirees to wait until later to begin drawing down benefits.

The administration hasn’t explained why they’ve retained a nominal "full benefit" designation at 65 in the middle of these payout increases, but one could guess that it might be political. In reality, the greatest benefit occurs when you wait to begin drawing down until you’re 70. For some readers, to call that the "full benefit" age might make it appear that the benefit age had increased by five years.

The idea of a "full benefit" at some earlier and lesser benefit point preserves the historical idea of retirement beginning at age 65, which most Americans think of as an appropriate retirement age. In reality, the average age of retirement in 2018 was 59.9 and the median age was 62.

Beating the Odds

There are two good reasons for waiting as long as you can to draw your SS benefits. The first is that beginning at a certain point — the so-called "full benefit" age — the payout rates increase. When the SSA first began DRCs, the annual increase each year from 65 onward was 3 percent. From there, it’s climbed incrementally until it’s now reached an annual 8 percent. You can only get that higher rate by waiting to draw benefits until you’re at least 66 years old. To get the maximum benefit, you have to wait until you’re 70.

But the best reason to wait as long as you can is that a substantial increase in the average age of death from 1983 to 2019 means that the actuarial basis calculated by the government in 1983 for the increased rates from age 65 to 70 is skewed in your favor. In 1983, the average age of death for U.S. males was 74.46 and 78.1 for women.

In 2018, it’s 76.1 years for men and 81.1 for women. Since, on average, you’re going to live longer than the government anticipated, you’re also going to be around longer to collect SS benefits. If you wait to collect the benefits at the highest rate, you’re going to be collecting them on average about two or three years longer than the government expected when they set these rates in 1983. The odds are in your favor.