Is it a huge mistake to participate in social security at the age of 62?

When your 62nd birthday approaches, you will make a major decision: Should you receive social security and receive lower benefits when you are 62 years old? Or should you delay Social Security to get a higher benefit amount?

The answer to whether participating in Social Security at 62 is right for you depends on several factors: your life expectancy, whether you retire early, and your overall financial situation.Here are some things you need to consider Retirement plan.

Early way to apply for social security

If you claim Social Security Based on your own records or you are receiving spouse benefits, you can start receiving benefits as early as 62 years old. If you are a surviving spouse, you can start receiving benefits at the age of 60. However, if you receive benefits early, you will face a reduction in lifetime benefits.

Your social security benefits are based on your main insurance amount.If you start from Full retirement age. If you were born in 1960 or later, your full retirement age is 67 years. The full retirement age ranges from 66 years for people born in 1943 to 66 years and 10 months for people born in 1959.

Any time you receive social security payments before the full retirement age, you must receive reduced benefits. For each year of early benefits, your benefits will be reduced by 6.66%. If you start receiving benefits at the earliest eligible age of 62, your benefits will be 30% lower than when you waited until you reached the normal retirement age.

However, if you can stick to the full retirement age, you will receive deferred retirement points. These amounts are 8% per year until your social security benefits end at age 70. By the time you are 70 years old, your monthly benefits will be 77% higher than when you were 62 years old.

Expert tips

If you claim Spouse benefits, You will not be able to earn deferred retirement points. Your benefits will reach their maximum at your full retirement age.

Maximum social security benefits in 2022

Starting age maximum profit
62 years old 2,364 USD
65 years old USD 2,993
66 years old 3,240 USD
67 years old USD 3,568
70 years old 4,194 USD

It makes sense to participate in social security at 62

Choosing when to receive social security retirement benefits is one of the biggest personal financial decisions you make. However, in the following situations, you may want to start receiving benefits as early as 62 years old.

You have health problems

If you are in poor health, or if your parents died early, it usually makes sense to declare early. Your social security payment will be lower, but applying early may result in higher overall lifetime benefits.

But remember, your life expectancy is difficult to predict. Even if your health is not perfect, your life expectancy is likely to be longer than you predicted. According to data from the Centers for Disease Control, people who are 65 years old in 2019 can live an average of 19.6 years. It is much more risky than leaving money on the table.

Expert tips

Although you can apply for social security retirement benefits as early as 62 years old, most people are not eligible medical insurance Until 65 years old.

You have urgent financial needs

The irony of Social Security is that those who rely on it most often cannot afford the larger monthly benefits.That’s because many older workers Forced to retire early Due to health issues, layoffs or care responsibilities. In these situations, social security income can become a lifeline.

If delaying the Social Security retirement check puts you in debt, it is a wise decision to apply in advance. Similarly, if delaying Social Security will cause you to give up health insurance or medical treatment, you don’t want to wait.

You don’t plan to work

Take Social security during work If your salary exceeds certain limits, your monthly benefits will be reduced before the full retirement age. In 2022, for every $2 you earn over $19,560, your social security payment will reduce your benefits by $1. In the year you reach full retirement age, the annual limit is $51,960, and the Social Security Administration will only withhold $1 for every $3 you earn over this amount. Once you reach the full retirement age, you don’t have to worry about reduced benefits.

But you will not give up this money forever. When you reach the normal retirement age, Social Security will recalculate your benefits at a higher amount to provide you with a credit for withholding funds. However, this temporary reduction usually makes it not worthwhile for you to receive social security early when you are still employed.

When to postpone receiving social security payments

Obviously, there is a lot of speculation about when to receive social security benefits. If these conditions apply, consider waiting to claim unemployment benefits so that you can receive more money each month.

Your health is very good

When your life expectancy is higher than average, it usually doesn’t make sense to receive benefits early. The cost of living adjustment of social security, or COLA, is seriously lagging behind the increase in the real cost of living faced by the elderly.Despite the surging inflation Social Security COLA is 5.9% in 2022, In most years, it hovered around 1% or 2%. Starting from the benefits that have been reduced, it is difficult to keep up.

If you want to live to your 80s or 90s, waiting is usually the best option. Every year you wait until you are over 62 years old, your check will increase by 6.66% until the full retirement age. After that, they will increase by 8% until you reach the maximum benefit at the age of 70.

Your spouse will ask for your benefits

If you are married, you cannot just consider your social security retirement benefits. You need to consider how your decision affects your spouse.

Generally, it makes sense for spouses with higher incomes to wait, especially if they are much older than spouses with lower incomes.If high-income earners die before low-income earners, low-income earners will be able to transfer to high-income earners Survivor’s welfare. A widowed spouse can receive up to 100% of the deceased spouse’s benefits.

You postpone retirement

If you are still able to work and like your job, then delaying your social security payment is a wise strategy. Of course, if you do not retire early, you will be able to get even greater benefits.But by earning a salary, you can avoid taking your 401(k) or Individual Retirement Account (IRA), Give your money more time to compound.

Can you revoke your decision to apply for social security?

You have two opportunities to change your decision to receive social security pensions.

  • You can withdraw your application: If you have received social security payments in advance and it has not been a year, you can complete the form SSA-521 to withdraw your application. You need to repay the social security for all benefits you receive, as well as any taxes or medical insurance premiums withheld. When you are ready to restart benefits, you need to reapply. Then, you will be eligible for higher benefits based on your age at the time.
  • If you have reached the full retirement age, you can suspend your benefits: If you have reached the full retirement age but want to earn 8% of delayed retirement points, you can contact your local social security office and request a suspension of your benefits. For example, if you suspend receiving benefits when you are 67 years old and start receiving them again when you are 69 years old, your payment will increase by 16%. If you don’t start again sooner, your check will be automatically reinstated after you turn 70.

As you can see, your options for changing your starting benefit decision are very limited. If you are not sure how to proceed, be sure to speak with a financial advisor before the first social security inspection.

Robin Hartill is Penny Hoarder’s certified financial planner and senior writer.Send your tough money questions to Or chat with her Penny Hoarders Community.

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