Do you need to start receiving Social Security benefits as soon as possible, at age 62? That’s the question we want to address here.
First, let’s cover some important details.
Social Security considers 66 as the “perfect retirement age” for people born between 1943 and 1954.
For baby boomers born between 1955 and 1960, the “age of full retirement” increases in two-month intervals — 66 months and 2 months (for those born in ’55), 66 months and 4 months (for those born in ’56), 66 months and 6 months until age 67. For everyone born after 1960, that age (i.e. 67 years old) is considered “full retirement age.”
However, Social Security allows you to start receiving benefits reduction Social security benefits prior to full retirement age starting at age 62.
Don’t miss that important detail. It will be the discount amount. The fact that Social Security is giving your money “early” means they pay less.
However, there are some compelling reasons to consider “turning on” Social Security at age 62, albeit for less money. here are 11:
1. If you are married, low social security benefits, and many younger From your spouse…
According to the life expectancy table, you will outlive your spouse and your Social Security spousal benefits will go into effect when your spouse dies. In that case, it might make sense to activate your perks early and start collecting what you can now. Because increasing the perks doesn’t make much of a difference. spousal benefits.
2. If you are concerned about the future of social security…
If you’re worried that Social Security will run out of money by 2035 (current estimates) or somehow cease to be a viable program, start paying early to ensure We recommend that you collect it at home.
Politicians are constantly talking about making changes to keep Social Security. These changes are most likely to be negative. So if you feel like collecting “what you can do while you can”, it’s a good idea to turn on Social Security at age 62.
3. Take too long to get a higher profit and you might die for nothing…
I know many people want to delay their benefits so they can maximize how much money they receive each month.but if i die Before Your 70th birthday, you don’t receive Any advantage.
Of course, no one knows when they will die. However, looking at your health and family history, you can make a reasonable guess. I have. If you wait too long and may not receive any benefits at all, you may be encouraged to start receiving Social Security benefits early.
4. If you have debts that need to be repaid…
Depending on the debt you’ve incurred and the interest you’re paying, it may make sense to get some extra money now to pay off your debt. Again, starting Social Security early will make you earn less each month than if you waited until full retirement age. , may be a good reason to start the social security system early.
5. If you can no longer work…
You may have planned to work all the way to 70 and then turn on Social Security, but for some reason you can’t work any longer.
You may have been fired. You may have health problems. But whatever the reason, you can’t work anymore and need to turn it on early to make ends meet. It could be for a good reason.
6. If you have a part-time job and your income is below the limit…
In 2023, if you’re under full retirement age, you can earn up to $21,240 a year and never lose Social Security. If you earn more than that, you’ll be rewarded with a gorgeous 2-for-1 special. In other words, for every $2 you go over the income limit, you lose $1 in Social Security benefits.
Once you reach full retirement age, you can earn as much as you want and Social Security will not reduce your benefits. If you’re only working part-time and are sure you’ll be below that limit, then it’s a good idea to activate Social Security. Before full retirement age.
7. If you already have 35 years of highest income…
Your Social Security benefits are based on your best-paid 35 years of income. If you already have 35 years of top income, probably only work part-time, and haven’t exceeded that top income, it’s a good idea to activate early.
However, there is this. If at age 62 he only has 30 years of coverage, he will have five years of zero added to the average. This can make them want to work longer or delay the start of Social Security. But if you already have 35 years of good income, it may make sense to start your benefits early.
8. If you want to receive and invest (And I think you can do better than the increase you get from Social Security)
From full retirement age to age 70, there is an 8% increase each year. It’s pretty strong! However, as I said earlier, if you die before you receive benefits and don’t turn on Social Security, the beneficiary gets nothing. If you think you can earn more if you put in early and invest, this might be a strategy.
Another advantage of this strategy is that if you die, the money in your investment account will remain with the beneficiary. is left with nothing. For some, that may be reason enough to do it on the fly.
9. If you are single and have health problems…
You can do the math and figure out the break-even point of delaying Social Security. now it might make sense to you.
10. Your spouse taller than I’m a breadwinner and have health problems…
Because they are high earners, their Social Security benefits will be higher than yours. It means that higher profit is most likely to be your profit.
In that case, there is little reason to delay receiving your benefits.You might want to go ahead and turn it on and collect as much Social Security as you can Before When your spouse dies, your benefits are upgraded to survivor benefits.
11. If your spouse earns less and is older than you…
Let’s say your spouse reaches full retirement age and can turn on their Social Security and receive $500 a month. Let’s say you’re her 62, and if you activate her benefits, it will be $1,800 a month. By turning on your benefits, you will be able to receive your spouse’s benefits, and at full retirement age, you will receive $900 per month based on your benefits, instead of $500 per month based on your own benefits. can receive Allowing older low-income people to start spousal benefits may mean going ahead and applying early.
Conclusion
Some people have no choice. They have to file Social Security just to make ends meet. Others have choices, the only question being when is the best time to turn on Social Security.
Everyone’s situation is different. This is one of the great benefits of working with a financial planner. He or she can demonstrate different strategies for enabling Social Security. Depending on your situation, your monthly income, and the assets you have, all of this will influence your decision on when to activate Social Security.
Mel Stubbs is a financial planner and educator. Christy Capital We work with federal employees across the country to teach them how the retirement system works and how to plan for retirement using available benefits.
© 2023 Mel Stubbs. All rights reserved. This article may not be reproduced without the express written consent of Mel Stubbs.
