The Argument for Taking Social Security Benefits at 62
Retirement is something that you have waited for all your life. With one major source of your income likely to come from Social Security, it is only natural that you would begin to salivate at the thought of getting your hands on the money you have worked so hard for your entire life. That is why it can be such a difficult decision to choose whether to start taking the money at age 62 or wait until you are 67 in order to receive your full benefits for the rest of your life. While quick money is always desirable, keep in mind that the odds are good of you living into your mid-80s. Receiving up to 30 percent more money every month as a result of waiting five years is hard to pass up as well. Here are a few arguments to make for taking your Social Security benefits at 62.
You Have More Expansive Goals
If you are fortunate enough to have other retirement income than just Social Security, then you may have different goals for that money. You might have trips planned and a complete lifestyle already mapped out that makes you pretty self-sufficient. Keep in mind that the only way to get 100 percent of your Social Security benefits is to wait until you are of official retirement age before collecting on it. If you opt to start getting the money at the age of 62, you are looking at roughly a 30 percent money reduction in your benefits. If you are already quite active at 62 and are looking to cross as many items off your bucket list of things to do before your health declines too much, then taking the money out early might not be that big of a deal to you. It is a decision that you will have to weight against the reality that you may well live into your 80s or 90s, so make sure that you have sufficient income to make up for the difference.
Your Family May Receive Benefits
More and more Americans are living into their 60s with minor children in tow. If you are one of them, then certain Social Security rules apply to you that might make it worth your while to begin collecting benefits at 62. Eligible children, for example, can receive up to a total of 50 percent of your insurance amount, no matter when you start to claim your benefit. This PIA is actually the estimated amount of your Social Security benefits at retirement age. This means that your children or spouse could begin to draw that money when you are 62, and they would be receiving the same benefit amount that they would get if you were to wait until you reach full retirement age yourself.
Job Loss or Health Considerations
Everybody approaching retirement age has a different situation and station in life. As you get in your 60s, you might find that you have no job and no way to live off just social security. You might need to start receiving your benefits at the age of 62 in order to compensate for this. There is also a one time provision where you can reverse this decision within 12 months of making it. That could give you the time you need to have money to make ends meet while you secure a job. Do keep in mind that you would need to pay the money received back to Social Security if you decide to reverse the decision within that 12 month period. You might also find that you are in ill health and know you will not be living into your 80s. We certainly that this is not the case, but the reality is that not everyone lives for 30 or 40 years in retirement. If you are in poor health, it might make sense to start getting your benefits early, knowing that the difference will not really matter that much in the end.
While you will probably find that most financial planners will advise you to wait until full retirement age before claiming Social Security, these are three notable exceptions to the rule. Keep in mind that every person is different. You need to decide what is best for you and your family when it comes to your financial planning. This is particularly true when it comes to deciding when to start taking out your Social Security benefits.
