3 Great Reasons to Receive Social Security Benefits at Age 62 | Smart Switch: Personal Finance

(KaileyHagen)

You’ve probably heard that delaying Social Security is the ticket to bigger checks, but that doesn’t tell the whole story. Expecting a higher monthly benefit could reduce your lifetime benefit in some cases or cause you other financial problems. That’s why you’re better off signing up at 62 if any of these three situations apply to you.

1. You don’t expect to live long

Their Social Security Benefit it is based on your earnings during your working years and your age when you register. You have to wait until you full retirement age (FRA) — 66 or 67, depending on your year of birth — to claim the full benefit to which you are entitled based on your work history.

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If you start earlier, you will receive more years of benefits, but your checks will be smaller. You only get 70% of your total benefit by check if you claim at age 62 with an FRA of 67. Those with an FRA of 66 get 75% of their total benefit by check by claiming right away.

Delaying benefits increases your checks until you reach 70. Then you qualify for the maximum benefit of 124% of your total benefit per check if your FRA is 67, or 132% if your FRA is 66. This may cause you to delay Insurance Social may seem like the smartest option, but it all depends on your life expectancy.

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Those who expect to live to age 80 or older generally benefit from delaying Social Security, but those with shorter life expectancies do not. If you try to wait for the biggest checks possible at age 70 and die at 68, you won’t get anything out of the program. Even those who expect to live to age 70 will likely get a higher lifetime benefit if they sign up right away at age 62 rather than later.

2. You really need the money

Social Security Delay It doesn’t make sense if you need it to pay your bills. Yes, the delay leads to larger checks in the future. But if you do this, you could also rack up late fees on your obligations and debts. That will only create a financial nightmare for you, and larger Social Security checks in the future may not be enough to get you out of it.

If you want to delay benefits, you can first explore other options to cover your bills, such as taking a part-time job or taking out a loan for large purchases. But if that doesn’t work, apply for Social Security. Signing up early may mean a smaller lifetime benefit, but at least you won’t have to worry about debt collectors harassing you.

3. You are the spouse with the lowest income

Married couples should plan their Social Security claim strategy together to maximize their benefits. The correct approach depends on each person’s life expectancy and the couple’s finances. If they are struggling with their bills or a person doesn’t expect to live long, it makes more sense to file early, as discussed. But there’s another scenario where signing up at age 62 is smart.

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When one partner has earned significantly more than the other during their working years, the lower earner may want to enroll earlier. Their Social Security benefit can help the couple cover some of their expenses, while the higher earner delays benefits to grow their checks. Then, when the person with the highest income is ready to claim, the Social Security Administration will automatically switch the person with the lowest income to a spousal benefit if it is worth more than what they are already receiving.

But this approach is not ideal for all couples. If both people have earned similar amounts throughout their lives, it’s generally wiser for both people to delay benefits as long as possible. A spousal benefit, which is up to half of your spouse’s benefit in your FRA, is probably no more than what you qualify for on your own in this scenario, so claiming early would only secure a lower benefit for you.

When you sign up for Social Security is your decision, but in these situations sooner rather than later is probably better. If you don’t like the idea of ​​reducing your checks, you can always delay benefits a few months before you sign up. Hopefully, this won’t put too much pressure on your wallet and give your checks a permanent boost.

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