QUESTION: Should I take social security retirement at age 62?

ANSWER BY RICK COURTNEY:

As you approach age 62 a lot of people wonder if they should take Social Security retirement at age 62.  Age 62 is the earliest date that you’re eligible to start drawing Social Security retirement if you’ve paid into the Social Security system and become vested for that, but that’s not necessarily the best time to take it.

If you start taking Social Security retirement at age 62, that’s called early retirement and your Social Security benefit will be reduced from what it would be if you wait until your full retirement age.  Now for people, and most of baby boomers, the full retirement age is age is 66.  It can be younger for older people.  It can be a later date, up to age 67 for younger workers, but for most people in the baby-boom generation age 66 is full retirement age.

If I wait until age 66 and get full retirement benefits I’ll get everything Social Security says I’m entitled to based on what I’ve paid in through my earnings while I’ve worked during my life.  If I take those benefits early at age 62 it will be 25 percent less than the amount I would draw every month if I wait until 66.  And if I wait longer I will be entitled to delayed work credits and get an even higher benefit.

So a worker who may be employed still at age 66 may decide, I don’t want to take Social Security yet.  I’ll wait.  And if you could wait up until age 70 to take your benefits, for each year after your full retirement age year that you wait you will get 8 percent more for the rest of your life in your Social Security check.  So by waiting from age 66 to age 70 your monthly check would be 32 percent higher for the rest of your life.

So when do you take Social Security retirement?  It depends.  Some people may need to draw early because they have a health condition that they need the money to help pay for the care.  They don’t have other income or assets to draw from and they need that money now.  But if they can afford to wait later there are other strategies to consider, particularly when there’s a spouse involved that could maximize the benefits from Social Security in a much greater amount if you wait beyond early retirement.

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