Age 62 is the earliest age you can sign up for social benefits. And not surprisingly, it’s a popular age for seniors to report. Therefore, it is important to know the ins and outs of the program before you have the opportunity to claim benefits. Here are three important rules to put on your radar.
Applying early will reduce your benefits permanently
Even if you are allowed to demand social security from kl age 62do it before full retirement age (OFF) will generally reduce your monthly benefit for the rest of your life. FRA is either 66, 67 or somewhere in between, and that’s when you can claim your entire monthly benefit based on your personal earnings history.
But for every month you sign up for Social Security prior to OFF, your benefit gets a blow. And if you have a FRA of 67, filing at 62 will result in a 30% reduction in your favor.
Claiming benefits early can leave your spouse with less money
When you are single, the social security decisions you make can be based on your personal needs and no one else’s. But once you are married, those choices become more complicated.
Spouses who are not entitled to their own benefit cannot sign up for benefits until their partner does so. And it can therefore influence your decision on when to report.
Another thing you should know is that when you die, your spouse will be entitled to survivor benefits. It will correspond to the same benefit to which you were entitled while you were alive. And so if you require social security early and reduce your benefit in the process, you will end up leaving your spouse with what could be a much lower income stream for life.
Early submission while working may result in withheld benefits
You are allowed to work and charge social security at the same time. But if you do it before you get OFF, you could end up withholding some of your benefit if you make too much money.
This year, you can earn up to $ 19,560 without affecting your benefit. However, if your earnings exceed this limit, you will be deducted $ 1 in Social Security for every $ 2 in income.
That limit is much higher ($ 51,960) if you want to reach FROM this year, but are not there yet. And beyond that limit, you will only be deducted $ 1 in Social Security benefits for every $ 3 you earn.
But remember: When you sign up for benefits before you get OFF, you cut them down in the process. And it may not be worth doing if you work and earn enough income to expose yourself to withheld benefits.
Not everyone who is entitled to social security enrolls at the age of 62. But it is a good idea to familiarize yourself with the rules of the program before you reach that point. So if you are approaching your 62nd birthday, it may pay to spend some time reads out about social security so you can make wise decisions that serve you — and, if relevant, your spouse – well during retirement.