Will you take Social Security at age 62 or 70?

Deciding When to Take Social Security Benefits: Age 62 vs. 70

Introduction:

As retirement approaches, one of the key decisions individuals face is when to start taking their Social Security benefits. The age at which you begin receiving benefits can significantly impact your financial situation in retirement. While the full retirement age (FRA) is typically 66 or 67, you have the option to claim benefits as early as age 62 or delay until age 70. In this blog, we will explore the advantages and considerations of taking Social Security benefits at age 62 versus age 70, helping you make an informed decision that aligns with your unique circumstances.

Taking Benefits at Age 62:

1. Early access to income: Claiming Social Security benefits at age 62 provides you with immediate income if you need it to cover living expenses. This can be especially beneficial if you have limited savings or face unexpected financial challenges.

2. Longer period of payments: By starting benefits early, you'll receive payments for a longer duration compared to those who delay. If you anticipate a shorter life expectancy or have concerns about your health, taking benefits at 62 might be a suitable option.

3. Flexibility for personal plans: Some individuals choose to retire early and pursue personal interests or hobbies. Starting Social Security benefits at age 62 allows you the flexibility to pursue such endeavors while receiving a steady income stream.

Considerations for Taking Benefits at Age 62:

1. Reduced monthly benefits: Claiming benefits at 62 results in a permanent reduction in your monthly benefit amount. The reduction is approximately 30% if your full retirement age is 67, meaning you'll receive a lower monthly payment throughout your retirement.

2. Earnings limitations: If you plan to continue working while receiving benefits at 62, your Social Security payments might be subject to an earnings limit. Exceeding this limit could result in a reduction of benefits, which may not be ideal if you intend to work full-time or have significant earnings.

Taking Benefits at Age 70:

1. Increased monthly benefits: Delaying Social Security benefits until age 70 allows you to accumulate delayed retirement credits. For each year beyond your FRA that you delay, your benefit amount increases by approximately 8%. This increase can significantly boost your monthly income in retirement.

2. Potential for higher survivor benefits: If you have a spouse or dependents who may rely on your Social Security benefits in the event of your passing, delaying benefits until age 70 can lead to higher survivor benefits. This can provide greater financial security for your loved ones.

Considerations for Taking Benefits at Age 70:

1. Foregoing early income: Waiting until age 70 to claim benefits means you'll need to rely on other sources of income during the period from 62 to 70. If you don't have alternative income streams or substantial savings, this may not be a viable option.

2. Uncertainty about life expectancy: While delaying benefits can lead to higher monthly payments, it's important to consider your own health and life expectancy. If you anticipate a shorter lifespan, it might be more advantageous to start receiving benefits earlier.

Conclusion:

The decision to take Social Security benefits at age 62 or 70 involves weighing various factors, including your financial situation, health, and personal goals. Starting benefits at 62 provides immediate income and flexibility but results in reduced monthly payments. On the other hand, delaying benefits until 70 offers higher monthly payments and potentially greater survivor benefits, but requires you to rely on other income sources in the interim.

To make an informed decision, consider consulting with a financial advisor who can evaluate your specific circumstances and provide personalized guidance. By carefully assessing your options, you can optimize your Social Security strategy and create a more secure and fulfilling retirement.

[MikeMontesi]

That is 8% per year plus COLA every year past 67. Please correct your video as it implies that you only get an 8% increase between 67 and 70

[HyenaOnTheRoad]

Like any of this younger generation is gonna get to retire. That's a gas.