One important choice that can greatly affect your retirement income is when to begin Social Security collecting. Although the earliest age one may claim Social Security is 62, your birth year determines your full retirement age (FRA). Most born after 1960 find it to be 67. Still, does it pay to delay? Let us dissect the advantages and drawbacks of claiming at 62 rather than 67.
Understanding the Basics
- Beginning Social Security at age 62 will let you start getting payments right away. Your benefit will be permanently lowered, nevertheless, for the rest of your life. Your birth date determines the precise decrease.
- The age at which you get 100% of your complete retirement payout is 67, the full retirement age.
- Delayed Retirement Credits, or DRC, will be earned if you wait to claim Social Security beyond your FRA, therefore augmenting your income by 8% year up to age 70.
The Case for Claiming at 62
- Starting benefits at 62 offers an instant cash source, which might be rather important depending on your other income streams or restricted savings.
- Potential Health Issues: Should you have health issues or anticipate a shorter lifetime, claiming early can optimize your benefits.
The Case for Waiting Until 67
- Waiting until your FRA will allow you to get your full retirement benefit, much larger than the lower amount earned at 62.
- Living a long life means that waiting will result in much more money throughout your lifetime if your monthly benefit is larger.
- Delaying claiming helps the lower-earning spouse maximize spousal benefits as well.
Factors to Consider
The choice of when to file for Social Security is difficult and based on several elements:
- If you want to have a long life, postponing rewards is usually wise.
- Health: Should you have major health issues, claiming early might be a wiser course of action.
- Financial Needs: Should you need money right now, claiming 62 may be required.
- Think about your other retirement income sources—pensions, savings, and investments among others.
- If you are married, think about how claiming benefits might affect the benefits of your spouse.
Additional Tips
If you are still working at 62, you could be eligible for a trial work term, which would let you earn some money with reduced benefits.
Review Couples' Claiming Strategies If you are married, there are many claiming techniques to maximize your joint advantages.
See a financial adviser. A financial counselor may assist you to evaluate your particular circumstances and create a customized Social Security claiming plan.
The finest choice comes ultimately from your situation. To make a wise decision, carefully balance the advantages and disadvantages, think through your financial objectives, and see a financial expert.
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