Biggest Advantage of Claiming Social Security at 62 Years of Age Sponsored By:Flavio J. “Joe” Carreno
Look at any online guide, and it will tell you to wait as long as you can before starting to claim Social Security. It will say to claim at your full retirement age or, if possible, even later at 70. The reason for this is that claiming early permanently reduces monthly benefits later on. In other words, the money has to stretch across a longer period. Between your FRA and 70, your prospective monthly benefit grows by 8% each year.
Despite this knowledge, 62 is still the most common claiming age. In our experience, the age at which people should start claiming Social Security all depends on their circumstances. Therefore, there’s no right or wrong answer. Yet, it is wrong to start claiming without understanding the best time for YOU.
Choosing Your Claiming Age
When reading about claiming Social Security, you’ll frequently notice the term full retirement age (FRA). But what does this mean? Essentially, it’s the age at which you’ll receive 100% of the scheduled benefits. Claim before, and you’ll get penalized. Claim after, and your monthly benefits will be higher.
If your FRA is 67 and you start claiming at 62, you’ll only receive 70% of your expected monthly benefit. If you start claiming at 64, you’ll receive 80% of the expected monthly benefit. Finally, at 67, you’ll receive 100%. Wait until 70, and this increases to 124% of the planned initial monthly benefit.
For most workers, the full retirement age is between 66 and 67. Similarly, most workers will benefit from waiting to claim. As we’ve just seen, this increases the monthly benefit and ensures that you have a comfortable retirement. However, there are some situations where it’s worth claiming at 62.
Why Some People Should Claim at 62
In truth, some people should claim at 62 years of age because it makes financial sense. Sadly, a considerable number of workers in the United States are behind on their savings (you probably don’t need us to tell you!). If bills are coming through the door and you just can’t keep up, it might be time to claim Social Security and start receiving those benefits.
Thanks to the 2021 Retirement Confidence Survey, we can see that 27% of workers in the US have less than $25,000 saved. Meanwhile, only one-third have saved more than $250,000. Of all American workers, just over half have over $100,000 saved. These are troubling statistics, which could explain why quite so many people claim Social Security from 62.
If you haven’t yet left the world of work, another option would be to delay Social Security and continue working. Of course, this doesn’t help those with health issues or those who work in businesses trying to downsize. Last year’s edition of the Retirement Confidence Survey showed that almost half of retirees were forced to leave work earlier than originally planned.
As well as claiming to survive, some people choose to claim at 62 because they have the funds to retire early and want the money to enjoy activities that they may not be able to do in the future. For example, they may wish to tick items off a bucket list, travel the world, or finally renovate the house/garden. You might want to do things now while you’re a young retiree, and Social Security can help in this regard.
Furthermore, those with a shorter life expectancy may claim early. Why? Because they don’t need the funds for as long. If you expect your health to deteriorate in retirement, claiming early means that you get more checks.
Finally, some plan finances with their spouse and realize that claiming at 62 is the best route. Let’s say that your spouse has a better earnings history. In that case, you can save them from having to claim by receiving your checks early. Meanwhile, their future Social Security monthly benefit keeps growing.
Summary
I don’t believe people when they say that nobody should claim at 62. We’ve just seen a handful of scenarios where it’s a strong decision. Don’t just follow the crowd. Instead, consider your own circumstances and choose the best claiming age for you and your close loved ones!
Contact Information:
Email: [email protected]
Phone: 8139269909
Bio:
For over 30-years Flavio “Joe” Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
