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Your Social Security Advisor

Should I Take Social Security at 62? – Ask Rusty

social security administration portal benefits application disability benefits pension COLA benefit militaryDear Rusty:  My husband took an early retirement at age 62, and I will be turning 62 next year. I am having some health issues and I’m thinking about taking an early retirement. Is this a good idea?  Signed:  Uncertain what to do

Dear Uncertain:  That’s a difficult question to answer with so little information, but I’ll try to give you some pointers which may help you decide. In choosing when to start your Social Security benefits you should always look at several things, including how badly you need the money now, your current health and how long you expect to live. If you take your Social Security benefits when you are 62, the monthly amount you receive will be 27.5% lower than you would get at your full retirement age of 66 1/2. But if your current health issues mean that you must stop working and lose income you rely upon to make ends meet, then taking your benefits at age 62 will give you some badly needed financial relief. The fact is that Social Security was designed to pay about the same total amount of money whether you claim early or wait until your full retirement age. However, whether you actually get the same total amount in either case depends upon you living long enough to break even. Most analyses I’ve done reveal that if you wait and take your benefits at age 66 you’ll need to live until you are about 78 to collect the same amount of money you would have gotten if you claimed at age 62. If you live longer than your break-even age, you’ll have collected more in cumulative benefits by waiting until your full retirement age to apply. Another thing I suggest you consider is that by applying for Social Security benefits at age 62, you will be automatically deemed to be filing for both your own benefit and any spousal benefit you may be due from your husband’s record. A lower earning spouse is entitled to a “spousal boost” from the other spouse’s record, but only if that spousal benefit will be higher than they are entitled to on their own work record. At full retirement age (FRA) a lower earning spouse can get 50% of the higher earning spouse’s “primary insurance amount” (or “PIA”, what the 2nd spouse was entitled to at their FRA). But you only get that 50% if you have reached your full retirement age; if you take it earlier than that, for example at age 62, the spousal benefit will be cut to as little as 32.5% of the higher earning spouse’s FRA benefit amount. So, is it a good idea to take your Social Security benefits at age 62? Again, it depends upon your health, financial status and your expected longevity. If you apply early, your payments are smaller, but you get more of them; if you wait to apply your payments are larger but you get fewer of them. Unless, of course, you live to a ripe old age, in which case the larger monthly payment you get by waiting will undoubtedly come in handy when you’re older and your total cumulative benefits will be more. But all of that doesn’t matter if your current health and financial status mean you need the money now. It’s a choice only you can make.

And here are a couple of final thoughts: If you continue working while collecting early benefits you’ll be subject to Social Security’s annual earnings limit ($17,040 for 2018). But if your current health issues are severe enough that you can’t continue working, you may want to consider applying for Social Security Disability Insurance (SSDI) benefits. If approved, SSDI benefits would be based upon your FRA benefit amount, resulting in a higher benefit at an earlier age. And you can file for both early retirement benefits and SSDI at the same time, which would allow you to collect benefits earlier while your SSDI application is being considered.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.

 

 

 

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Jerry

I retired at 62 and do not regret it one bit. It was either that or kill my supervisor! (LOL) Seriously, my wife still works and her employer supplies my healthcare needs. We live beneath our means. We’re not wealthy, but we are comfortable. It wasn’t luck or magic that made it possible. It took many years of hard work, saving and planning that put me in position to retire early.

Dave Fiebig

Wow. Twelve years is a long time to break even. At 62, what are the odds I will make it to 74? I think I will take the money now. Remember a bird in the hand is worth two in the bush. The only thing I don’t understand is why would I ever want a bird in my hand? It’s gross and will probably crap in my hand.

Maria Rose

These questions asking about taking benefits at 62 versus waiting until FRA all come down to one thing. That is consideration of your financial situation at that age against your longevity and whether you are still able to postpone taking the benefits by continuing to work at least until full FRA without major physical harm to health.
That is only if you have the choice to continue working without the job terminating employment and forcing you to retire.

Priscilla Burden

I say take it as soon as you can. Otherwise the politicians will spend it and you will die before you even collect anything.

Rita Sutton

1976 I Got laughed out of a canidate forum because I thought the ages should go up drastically for retirement. When the ages were set people did mot live much past 68. Now you get what we and employers paid in plus what others pay in before we die. Financially breaking the soc sec funds at this rate. It is a retirement insurance not a total retirement fund.

Billy J Haffly

Dear Rusty,
I’m currently on Social Security Disability, I turn 62 in Nov 2018. My question is do I need to contact Social Security prior to Nov to apply for Social Security or is everything already set up?

Carlos

I am sixty years old i want to retire at age 62

GBx

Excellent response. most people don’t do the math. If I wait until 63, my SSA benefit will be 8% higher, but I will have forfeited $19,800 in benefit from age 62 to 63. It takes 12 years to recoup that forfeiture from my math–exactly as stated here. So, I wouldn’t makeup that forfeiture until 63+12=75. Since I also have a pension and several IRA’s, with no debts, I’ll be 61 in a few months and will retire early and draw pension and SS at 62. As the writer said, there are too many variables for a general rule.

Debra P.

Rusty, My husband was receiving SS when he died five years ago. I was 58 at the time and they told me I wouldn’t be eligible for widows benefits until I turned 60. However, they granted me disability benefits (which I didn’t even think about applying for, I just answered their questions) because I could barely walk much less work, due to arthritis in my hip and maybe the fact that I had no other income as his Navy pension died with him, I am now ready to turn 63 and am wondering if I have to chose between disability or regular SS benefits or am I eligible for both, the disability being mine and the survivor’s benefits being from my husband? I am pretty sure the survivors benefits would be a little more, especially if I wait until I am 66. What is the best way to figure it… Read more »

Richard

Lots of friends and family remembered died before collecting a penny of SS they paid blood tears and sweat into. I think everyone should be forced to work until F.R.A. as I write this from my position as a gentleman of leisure drawing revenue from various accounts with an income stream exceeding my needs and lifestyle requirements. Especially if they suffer from a medical condition and have easy work like loading cement bags from the back of a truck onto the loading dock platform about 2 or 3 feet higher than the truck bed while the diesel motor idles, inhaling the sweet fumes, have to save the planet you know from the excess fuel expenditure of a cold start up. Be seeing you on the beach hanging with Jimmy Buffett or sipping latte at the coffee house discussing how !>tRUMP<! has ruined everything by putting 'merica first and delivering on… Read more »

Rebecca Kiperts

Social security wouldn’t be in such bad shape if President Trump hadn’t passed the incredibly short-sighted so-called tax relief bill, which only benefitted the rich.