3 Big Reasons to Get Social Security Benefits at 62 | Smart Change: Personal Finance
You may have heard that Social Security delays are the ticket to the biggest checks — but that doesn’t tell the whole story. In some cases, sticking to a larger monthly benefit may reduce your life benefit or cause you other financial problems. That’s why it’s best for you to sign up at age 62 if any of these three situations apply to you.
1. Don’t expect to live long
Your Social Security benefits are based on your earnings over the years you worked and your age at enrollment. You have to wait until your full retirement age (FRA) – 66 or 67, depending on your year of birth – to claim the full benefits you are entitled to based on your employment history.
If you start early, you will receive more benefits, but your checks will be smaller. You only get 70% of your entire interest per check if you claim an amount of 62 with an FRA of 67. Those with a FRA of 66 receive 75% of their entire interest per check by claiming immediately.
Delaying interest increases your checks until you reach 70. Then, you qualify for the maximum interest of 124% of your entire benefit per check if your FRA is 67, or 132% if your FRA is 66. This can That makes delaying Social Security seem like the smarter option, but it all depends on your life expectancy.
Those who expect to live in their 80s or later usually benefit from a Social Security delay, but those with a lower life expectancy do not. If you tried to withstand the biggest possible paychecks at 70 and died at 68, you wouldn’t get anything out of the program at all. Even those who expect to live into their early to mid-70s are likely to receive a greater lifetime benefit by enrolling immediately at 62 rather than later.
2. You really need money
Delaying Social Security is meaningless if you need it to pay your bills. Yes, delays lead to increased checks in the future. But if you do, you can also accumulate late fees on your obligations and debts. This 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 explore other options to cover your bills first, such as taking on 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 could mean a smaller lifetime benefit, but at least you won’t have to worry about debt collectors chasing after you.
3. You are the low-income wife
Married couples should plan together a Social Security claim strategy to maximize the benefits. The right approach depends on the life expectancy of each person and the financial resources of the spouses. If they are struggling with their bills or one person is not expected to live long, it makes sense to claim it early, as has been discussed. But there is another scenario when subscribing to 62 is smart.
When one partner earns significantly more than the other over the course of its years, the low-income earner may want to sign up early. Social Security benefits can help a couple cover some of their expenses, while a high-income earner delays benefits to increase his paycheck. Then, when the high-income holder is ready to claim, the Social Security Administration will automatically transfer the low-income holder to a spousal benefit if they are worth more than they actually receive.
But this approach is not ideal for every couple. If both people earn similar amounts over the course of their lives, it is usually smart for both of them to delay the benefits as long as possible. The spousal benefit – up to half of the benefits your spouse receives in their FSA – likely won’t be greater than what you qualify for on your own in this scenario, so claiming early will do you less benefit.
When you sign up for Social Security it’s your call, but earlier is probably better than later in these situations. If you don’t like the idea of cutting back on checks, you can always delay benefits for a few months before signing up. Hopefully this won’t put too much strain on your wallet, and will give your checks a lasting boost.
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