Should I Collect Social Security At 62 – Whether you’ve had a retirement strategy in place for years or have been thinking about it, one thing is certain: you plan for Social Security benefits as part of your retirement income. But when should you claim your benefits?
While many people wait until retirement is on the horizon before taking the time more seriously, that’s not ideal. “I like to talk to my clients about their time in their 50s,” says Travis Rose, a financial advisor in Antigo, Wisconsin. “That way, we can plan for additional retirements, taking the pressure off of making a quick decision.”
- 1 Should I Collect Social Security At 62
- 2 When Should I Start Drawing My Social Security Benefits?
- 3 Social Security: How To Maximize Your Benefits
- 4 Great Reasons To Take Social Security Benefits At 62
Should I Collect Social Security At 62
Mike Fuhrmeyer, a financial advisor in Bloomington, Illinois, agrees. “The goal of timing is to maximize the amount of retirement benefits you can receive, minimize your tax liability and meet your needs,” he says. “It’s different for everyone.”
Can I Draw Social Security At 62 And Still Work Full Time?
Even when you’re about to retire, Social Security is a complex, nuanced program that requires you to consider all of your options. The questions we present here will help you understand how it works and how the rules apply to your situation and needs. Then you can go deeper into it with your financial advisor.*
Your eligibility for Social Security retirement benefits is based on the credit system. You earn four credits each year you reach Social Security’s adjusted minimum income ($6,040 for 2022). You must earn 40 credits during your work year to qualify.
You can begin receiving Social Security retirement benefits at age 62. But if you do, you’ll get less than what you’d get at “full retirement age,” depending on the year you were born. At full retirement age, you should receive 100% of your eligible retirement benefits.
If you can wait until age 70 to take Social Security, your benefit will be even higher. Between full retirement age (66 or 67) and 70, your benefit increases by 8% each year. Social Security adjusts payments each year for inflation, but there is no retirement benefit beyond age 70.
Three Reasons To Take Social Security Early
You’ll get Social Security retirement payments for the rest of your life, but remember this: “When you start, that benefit amount is usually fixed for life, meaning it doesn’t decrease,” says Fuhrmeyer. However, there are situations that can increase your benefits.
Knowing your estimated Social Security benefit is critical when planning for your retirement. Fortunately, finding that number is easy: Go to ssa.gov and look up your Social Security statement. The report shows how much you’ll receive at several key retirement ages (before taxes): 62, 66 or 67 (full retirement age), and 70. The benefit amount is basically based on your highest earnings over the next 35 years. If you don’t work for 35 years, lost years are set at $0.
It’s a good idea to review your statement annually throughout your career to make sure the income amounts in your work history are accurate. If you find errors, you should report them to Social Security.
To access the report, you must create a username and password. When you do that, you create a side benefit: some identity theft protection.
Raising Social Security’s Retirement Age Would Cut Benefits For All New Retirees
According to Fuehrmeyer, “When you set up your account, you’re essentially helping prevent thieves from creating an account in your name.”
No one knows how long they will live, but determining when to start Social Security requires some guesswork. Why is this important? If you’re 62, you’re basically healthy and longevity runs in your family, you can wait until full retirement age or age 70 so you can maximize your benefits.
On the other hand, if you are 62 years old and have health problems that you think will shorten your life, thinking that you will not live many years, you may decide to take benefits as soon as possible.
“One of my clients decided to start his retirement benefits at age 66,” says Fuhrmeyer. “He recently underwent a liver transplant and is believed to have a life expectancy of eight to 10 years. For him, it makes sense to start his benefits at full retirement age.
New Social Security Payment February 2024 For 62 Year Old
Jerry McGee, a customer at Rose’s in White Lake, Wisconsin, suffered from distal muscle weakness at age 62. They decided to start benefits early because it was difficult to work. His wife Lori retired a few years later. Since then, he’s focused on enjoying himself this year, spending time with family and traveling and sightseeing around his area in the convertible he bought.
“It’s not just about how long you live,” says McGee. “It’s also about how long you have quality of life.”
The goal of timing is to maximize the amount of retirement benefits you can receive, minimize your tax liability, and meet your needs. It’s different for everyone.
If you are at least 62 years old and your spouse has started receiving Social Security, you can receive spousal benefits. Depending on your age, that amount can be as high as 50% of your spouse’s benefit. It’s about whether or not you qualify for your own Social Security benefits. If so, you will receive a higher amount, either your benefit or your spouse’s.
When Should I Start Drawing My Social Security Benefits?
If you have a child under 16 or are disabled, you can claim spousal benefit before age 62 as long as your spouse can claim benefits.
It is paid to you when your spouse dies, usually if you are at least 60 years old and your spouse received or is eligible for Social Security benefits.
If you both receive Social Security payments after your spouse’s death, you may not continue to receive both benefits. But you get the most out of both.
“That’s why I encourage married couples, if they’re eligible, not to take their Social Security benefits until they’re 70,” says Rose. “That way, the surviving spouse gets the maximum amount.”
Curious About When To Start Claiming Social Security? This Could Help
Based on your ex-spouse’s income. You must be married for at least 10 years, currently single, and both you and your ex-spouse must be 62 or older. If your ex-spouse is not receiving benefits at the time of the divorce, the divorce must have taken place at least two years ago. From there, benefits depend on your year of birth:
You can get benefit based on your ex-spouse’s earnings. Your own benefit can increase by 8% per year between the ages of 66 and 70, at which point you have the option to switch to your own benefit.
You can file for a retirement benefit, but you will receive your own or your ex-spouse’s benefit, which is your lifetime benefit.
If your ex-spouse has died and you are at least 60 years old, you may be eligible for survivor benefits based on that person’s earnings. You then have the option of transferring to your own benefit from age 62 or waiting until age 70 to take advantage of delayed retirement loans. Or you can start your own benefit at age 62 and switch to a survivor benefit at full retirement age.
Social Security: How To Maximize Your Benefits
Do you want to retire in your 60s or do you plan to work until you are 70 or older? In general, the longer you work and delay Social Security, the higher your benefit until age 70. If you want to stop working before age 70, drawing income from your retirement savings is an option. Social security up to 70 years.
When you reach full retirement age, you can take Social Security and earn extra income without any reduction in your benefit.
When thinking about when to claim Social Security and how much you might get, remember that it can be
Additionally, depending on where you live (there are currently 13 state Social Security taxes), you may have to pay state income taxes on your benefits. Talk to a tax professional for specific guidance on your potential income tax liability.
In The Money Insight: Five Reasons To Draw Social Security At Age 62
If you are still a few years away from retirement, you may be able to maximize your benefits by taking the following steps:
If you’re deciding when to start taking Social Security, remember that your life circumstances may change and that Social Security rules may change. Fuehrmeyer says, “You should review your plans over time, and once you start taking Social Security, you should review your retirement strategy regularly.”
Social Security is considered a retirement program, and unmarried children who turn 18 (or 19 if still in high school) are eligible to receive Social Security benefits. A disabled child is eligible at any age if disabled before 22 years of age.
Each child can receive payments, which are up to 75% of that parent’s death benefit. But a family can receive a maximum amount that limits what each child can receive.
Great Reasons To Take Social Security Benefits At 62
To help you evaluate your specific situation, check
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