Sorry to Say: You Probably Shouldn’t Claim Social Security at 62

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There’s a reason so many seniors routinely sign up for Social Security at age 62. That’s the earliest point you can get benefits, and if you’re filing at age 62, it could mean leaving the workforce at a relatively young age.

But there is one major drawback to claiming Social Security at age 62, and it involves a lower monthly benefit for life. And that can be problematic if your retirement takes longer than you initially expected.

Longevity is a blessing and a curse

Americans are living longer these days. And while that’s a good thing in theory, it can be challenging from a financial standpoint.

Image source: Getty Images.

Many people save for retirement with the expectation that their nest eggs should last 15 or 20 years. Well, what happens when you end up living in your 90s instead of your 80s? At that point, you may run out of savings and struggle to make ends meet during the end of retirement, when you may need more financial resources to cover the costs of things like meal delivery and assistance with day-to-day living if mobility issues arise.

That’s why claiming Social Security at age 62 is a choice you might regret a lot. When you sign up at age 62, you reduce your monthly benefit by 25% to 30% compared to what it would otherwise be at full retirement age.

Meanwhile, Social Security is designed to keep you paying your monthly benefits for the rest of your life. So if you reach the age of 90 and your nest egg is gone, you still have a monthly benefit to look forward to. And it can work in your favor to make that monthly benefit bigger, not smaller.

So when should you are applying to social security? Well, that depends. If you have a decent amount of savings, you may decide that your precise full retirement age is the right time to start receiving your benefits. But if you’re not too sure about your savings, you may want to delay filing until after full retirement age. For each year that you delay taking benefits, until the age of 70, those benefits will have a permanent increase of 8%.

Think carefully before submitting early

Many people claim Social Security early because they feel they are entitled to their money after a lifetime of hard work. And that is very understandable. Meanwhile, some people may be driven to apply for Social Security at age 62, fearing that the program will soon run out of funds (it isn’t, but that’s another topic altogether) .

Regardless of your reasons for claiming Social Security at age 62, before you do so, think about the ramifications of permanently lowering your monthly benefit. You might think you’ve built a strong nest egg that will last as long as you need, but you may not. And a higher monthly Social Security payday could serve as your personal safety net in that undesirable scenario.


The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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