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Today's News and Features

Three Reasons to Take Social Security at 62

Tuesday, January 23, 2018

By Barbara Pronin Popular wisdom has it that the longer you wait to start collecting your Social Security benefits, the larger the monthly check you will receive. In essence, that is true.

However, as the money mavens at The Motley Fool point out, since the Social Security Administration (SSA) changed the rules so that full retirement age is not 65, but is based on the year you were born, there are several reasons why it might make financial sense to start collecting your benefits earlier than you planned. Here are the top three:

You may have to start at 62 – According to the 2016 Retirement Confidence Survey, 46 percent of retirees were forced to leave the workforce earlier than expected – due either to unexpected health problems or to changes at work, such as downsizing. Since retiring ahead of schedule may mean you have less money socked away, being able to collect benefits at 62 could be a blessing.

It may be a wash – It’s true that the longer you wait (until age 70), the larger your check will be. But, as the SSA explains, “if you live to the average life expectancy as someone your age, you will receive about the same amount in lifetime benefits no matter whether you choose to start receiving benefits at age 62, age 70, or any age in between.” That’s because the system is designed so that for those who live average age lives, it will be a wash in terms of total benefits received no matter when you start collecting. If you delay starting to collect from age 67 to 70, for example, you will miss out on a full three years of payments – albeit smaller ones. (Of course, if you love working and would rather stick with it until age 70 or later, it may make sense to wait and ultimately collect the larger monthly amount.)

Claiming early could help you retire early – Early retirees enjoy the benefits of being  not so old and not so sick, making it easier to travel, golf, and pursue other more active hobbies – and if your family tree is full of people who lived less than average lives, consider that in terms of when you will start to collect. Even if you beat the odds and live longer, you will still be collecting benefits.

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