September 10, 2019 | by Thomas Day
Assume that you are age 62 this year and your full Social Security retirement age will be 67, five years from now. Assume the age 67 amount will be $1,500 a month or $18,000 a year. What if you wish to take Social Security now instead of waiting until your full retirement age? At age 62 your full retirement benefit will be reduced by 70% and you will only receive $1,050 a month or $12,600 a year for the rest of your life. Why then would you want to take a reduced amount of Social Security for the rest of your life? Here are three possible reasons.
- There is little other choice
- Due to poor health it makes sense to take it earlier
- Adequate retirement income allows for investing Social Security
1. There is little other choice
Many people either single or married and who are in their early 60s are struggling to make ends meet. Perhaps they are not employed or underemployed and don’t make enough monthly income. Being able to get an additional $1,050 a month as in our example above could make a significant difference for these people. This is likely one major reason why about 30% of all individuals in the United States have taken Social Security at age 62.
There is a caveat however. If someone taking Social Security is still working at age 62, and if that person earns more than $17,640 in 2019, his or her Social Security will be reduced by one dollar for every dollar earned over the limit. It is likely that many people taking early Social Security are also still employed. If that person were earning $25,000 a year and then elects for age 62 Social Security, that person would be over the earnings limit by $7,360 and his his or her he Social Security would be reduced accordingly.
Continue Reading - 3 Reasons to Take Social Security at Age 62
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