We're in a similar situation and also in CA. I could get out at age 52 (spouse would be 55) with a pension payment that would probably just barely cover basic living expenses. Or, for every year I wait, the monthly payment rises exponentially until it maxes out at 62.
This is what went into our decision:
1. Paying off the house reduces monthly expenses, which means we need less income every month. The sooner it's paid off, the sooner we can retire.
2. We can use our own savings to finance those early years. Say we retire at 52 & 55 with that relatively low payment. If we defer taking the payment and instead fund those first 5 years out of our own savings, we can still reap the higher benefit payment because we'll be older when the pension starts paying. Sure, we'd miss out on any potential raises or COL adjustments in those 5 years, but raises and COLAs are rare around here. Right now, for example, I'm still being paid what I was in 2007.
3. Or, we could retire at 52/55, start payments immediately, and then use our own savings to raise our own income a little as necessary. I like this plan a little better because our own savings don't get depleted so much in those first 5 years, and we only have to take money as needed, so we have more flexibility.
We haven't decided yet because we have a child to put through college first, and I'm not yet sure how that will affect our savings. With 10+ years to go for us, there are still too many variables to make a solid decision.
