Work. Retire. Receive your monthly Social Security checks. The process seems simple. And it is -- for the most part.

The reality, though, is that there are some important decisions that you'll have to make with respect to Social Security along the way. Some of them have big consequences. There's one Social Security mistake that could even cost you $182,000.

Two people with stunned expressions looking at a laptop.

Image source: Getty Images.

The early bird doesn't get the worm

You might think that $182,000 number couldn't possibly be true. But it is for many Americans, according to a working paper recently published online by the National Bureau of Economic Research (NBER).

David Altig with the Federal Reserve Bank of Atlanta, Boston University research associate Laurence Kotlikoff, and Opendoor Technologies research scientist Victor Yifan Ye performed a detailed analysis of the economic costs of claiming Social Security benefits early. They found that the old adage that the early bird gets the worm was wrong.

The paper published by NBER determined that nearly every American between the ages of 45 and 62 should wait until at least age 65 to begin receiving Social Security retirement benefits. More than 90% of these individuals are better off waiting until age 70.

Few of these Americans actually hold off until they reach 70 to collect Social Security benefits, though -- only 10.2%, according to Altig, Kotlikoff, and Ye. The researchers found that early Social Security claimants paid a hefty price: The median lifetime loss resulting from not waiting until age 70 was $182,370. 

When waiting isn't the best option

These numbers don't lie. There truly is a significant cost associated with beginning to receive Social Security benefits before age 70 for many Americans. However, are there cases where waiting to claim benefits isn't the best financial option? Absolutely.

Probably the best reason to take Social Security at age 62 is if you face serious health issues. Any analysis of when to file for benefits should include life expectancy. 

The Social Security Administration's actuarial tables project that the average male who reaches age 62 will live another 20 years. These tables estimate that the average 62-year-old female will live another 23 years. If your health conditions make it likely that your life expectancy will be shorter than these projections, claiming Social Security retirement benefits early could be a good idea.

Some wealthier individuals don't need Social Security checks to live a comfortable lifestyle during their retirement years. They could nonetheless begin receiving benefits before their full retirement age and invest the money. It's possible that their investment returns could be greater than the amount they would have made by waiting to receive Social Security benefits.

Of course, some people are willing to accept the negative financial consequences of claiming Social Security benefits early. They believe that the advantages of retiring early are worth the price that they pay.

Plan carefully

When to claim Social Security benefits ranks as one of the most important retirement decisions you'll ever make. As the paper published by NBER shows, waiting until age 70 makes sense financially for most Americans. However, holding off that long could be unappealing if it means working longer than you'd like. 

Ultimately, every person has to decide what's best for them. Whatever you do, plan carefully. Your decision could come with a cost.