3 good reasons to receive social benefits at age 62
3 good reasons to receive social benefits at age 62

3 good reasons to receive social benefits at age 62

You will often hear that it is a bad idea to sign up for Social Security at 62 years old. The reason? It will provide a lower monthly benefit for the rest of your pension.

You are entitled to receive your full monthly benefit based on your earnings history when you reach full retirement age. FRA is either 66, 67 or somewhere in between, depending on when you were born.

If you claim Social Security at age 62, your benefits will be cut by 25% to 30%, depending on your specific FRA. And it’s a pretty big hit to take. Despite this, it makes sense to apply for benefits at age 62 in these circumstances.

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1. You will

If you retire with one multi-million dollar nest eggs, then the chances are that your savings will be your primary source of income. And so if that is the case, you have basically earned the right to apply for Social Security whenever you want, as these benefits will really only be a secondary source of income for you.

In fact, you may be in a position where your social security benefits will only be used for leisure expenses. And if so, then feel free to claim these benefits no matter what age works for you.

2. You must

You may not want to claim social security at 62 because you would rather have a higher monthly benefit to look forward to. However, if you are laid off at the age of 62, you may need to apply for benefits if you are unable to get a new job.

Unfortunately, it can be harder to get hired later in life. While it is illegal to deny someone a job based on age, it is also a difficult thing to prove. And so if you find yourself out of work at age 62, claiming social security may be your only option to replace your lost paycheck.

Even if you are not forced out by your employer, health problems can do so, so you will have to retire early. And if so, you may need to apply for benefits at age 62 to make sure you have enough income to cover your expenses.

3. You can turn this money into a current income stream

Some people apply for social security early with the intention of investing that money in stocks and growing them into a larger sum. However, it is a somewhat risky prospect because you will need to generate a sufficiently high return to offset the hit you want to take to claim benefits early.

On the other hand, if you apply for Social Security at 62 and use your benefits as start-up money to start a business, you may be able to generate more than enough income to compensate for a lower benefit. This is especially true if you have mapped out a business plan and have knowledgeable management skills.

What is the right decision for you?

Demanding social security at the age of 62 does not make sense for everyone. If you lack pension savings and have the opportunity to continue working well into the 60s, then it pays to win a higher benefit and avoid a financial crisis through your senior years. Similarly, if you enjoy your job and are able to keep up with it, then you might as well endure requiring social security so that your monthly allowance can grow.

But if the above scenarios apply to you, then an application for social security as early as possible is a step that can serve you very well. And therefore, it pays to consider the benefits of claiming benefits when your 62nd birthday arrives.

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