Is Collecting Social Security at 62 Right For You?, #148
Should you start collecting Social Security before you retire? Many clients and listeners worry about Social Security running out and want to take advantage of it before it’s gone. Clients ask me if they should collect benefits as soon as possible at 62. In this episode, I’m discussing five critical questions to ask yourself before collecting Social Security to set you up for retirement success.
You’ll want to Tune into this episode if you’re interested in...
Discovering the key dates and ages for Social Security [1:53]
Learning how your work status affects Social Security? [3:40]
How being married affects Social Security? [6:53]
How your health plays into your benefits [8:05]
Learning how having dependent children affects Social Security [9:44]
Discovering how a pervious marriage could impact your benefits [10:43]
Mark your calendar
One of the biggest steps toward retirement that anyone can take is beginning to collect Social Security benefits. Many Americans can’t wait to start retirement and opt to receive benefits as soon as they turn 62. This is the first key date in the process of Social Security collection.
The second key date is when you reach your full retirement age. If you were born in 1960 or later, the full retirement age is 67. To contrast, those born in 1954 or earlier have a full retirement age of 66. So what happens if you were born between 1954 and 1960? Well, the full retirement age increases by two months for each year you were born after 1954 up to 1960. Therefore, if you were born in 1957, then your full retirement age would be 66 and 6 months.
The final key date for Social Security collection is your 70th birthday. If you wait to collect until you’re 70, you'll receive your highest possible Social Security benefit. Thanks to an annual delayed 8% credit earned every year between your full retirement age and age 70. Those who start collecting Social Security at age 62 receive roughly 70% of their benefits, so waiting is usually in your best interest if possible.
Are you still working at 62?
The first thing to consider before collecting Social Security at 62 is your employment status. Those who decide to collect benefits early and continue to work are subject to an earning limit. The SSA deducts $1 from your benefits for every $2 you earn over the limit. That’s not a lot of money to live on, seeing as the annual earning limit for 2022 is $21,240. If you wait to start collecting benefits until your full retirement age but remain employed, the annual earning limit jumps to $56,529.
Things to consider if you’re married
You should also consider your marital status when deciding if collecting Social Security benefits is right for you. If you’re married and your spouse outlives you, they’re eligible to collect the higher of the two benefits. If you start collecting benefits at 62, you’re deciding that you and your spouse will have a reduced benefit amount for the rest of your lives. Consider your options carefully and make the best decision for you and your family. Listen to this episode for more on collecting Social Security at age 62!
Resources Mentioned
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