THE PERPLEXING WORLD OF SOCIAL SECURITY AND EARNINGS IN RETIREMENT

Launched in 1935 during the Great Depression as a principal component of Franklin D. Roosevelt's New Deal recovery program, the Social Security System has earned an unquestionable reputation for the reliability of its stream of monthly checks to retirees, the nation's first comprehensive source of retirement income.

But did the laws that authorized the checks and ensured their reliability also:

• Permit the check based on your lifetime income to be large enough to sustain seniors in comfortable retirement?
• Require Social Security checks to be taxed too much by the same Treasury Department which issued them?
• Reduce the checks too severely for those who needed money before becoming 65.
• Enable beneficiaries to get back all of the money they had paid into the system over the years?

While these question and the question of the system's continuing reliability as the ratio of beneficiaries to taxed active workers increase are debatable and debated by lawmakers, the most baffling for many individual workers as they plan for the approach of retirement is: when do you start receiving Social Security checks?

The answer, partly rooted in changing regulations, is not easy. Nor is it the same for all individuals.

Yet, it is very important. On it depends not only when you start to receive checks, how large your checks will be the earlier you start, the smaller your checks and how much you may earn from other work once you start, but also how much net Social Security income you will have left after income taxes.

To understand how these things are determined, you first have to understand the regulatory concept of your normal retirement age (also called your full retirement age) at which your retirement benefits equal your primary insurance amount. For those born in 1937 or earlier, it is 65. For those born in 1960 or later, it is 67. For those born in 1938 through 1959, it is in-between. (Useful tables which spell out this and other relevant regulations appear on the Social Security Administration's Web site, www.ssa.gov).