(MONEY Magazine) – Okay, so you've lied about your age. People do it all the time. Trouble is, your little secret can cost you big bucks when you're ready to retire. So it's generally best to sacrifice vanity and tell the truth about your age to Social Security and to your employer. Here's why:

You can start collecting Social Security benefits at age 62--provided you inform the Social Security Administration (SSA) that you are 62. That could be a problem if you've told your spouse that you're 58. Says Leslie Walker, director of public affairs for the regional SSA office in San Francisco: "Many people fib about their age and find themselves in a bind when it comes time to collect."

Lying to your employer can be even more costly. You can lose up to one-third of your defined-benefit pension income by sticking to the deceit that you're five years younger than you really are. That's because pension benefits are often based partly on your age: The older you are, the more money you'll get. Florence Bodenstein learned that the hard way. Bodenstein retired in 1992, just before her 79th birthday. But because her employer based her pension on her saying that she was 10 years younger, she got only about 40% of the $24,000 she had expected. "I thought I needed to be younger to land the job," she says. "I'm fighting this."

Also, some companies will subsidize retirees' health insurance coverage from age 55 until Medicare kicks in at 65. So if you are 55 when you retire but your employer thinks you are 50, you could forfeit that coverage.

Note: If you're the primary wage earner in your family and your spouse or dependents are entitled to retirement benefits based on your Social Security account earnings record, the agency will alert them when they are due some money. However, if no one else will get a Social Security check because of your work experience, Social Security has no reason to inform anyone else. As for your boss, if she thinks you're a springier chicken than you are, tell your benefits counselor the truth. He's professionally bound to keep your age confidential. And you could retire with a larger nest egg. --Judy Feldman