Age 62 is the earliest you can sign up for Social Security. It has also been a very popular age to apply for benefits.
But 62 years is not the only age at which you can receive unemployment benefits. In fact, you can apply for benefits all the way up to the age of 70. You can even technically sign up Social Security after 70 years, even if there is no financial reason to defer your claim beyond that time.
If you are not sure if 62 years is the right age for you to sign up for benefits, it is important that you understand the pros and cons. Here’s a quick overview of the ways you can win – or lose – by requiring Social Security at 62.
Pro # 1: You get your money faster
You are entitled to your full monthly social security benefit based on your earnings history when you reach full retirement ageor OFF. FRA starts at 66, 67 or 66 and a certain number of months. It all depends on your exact year of birth.
Meanwhile, the difference in your health and energy levels between the ages of 62 and 67 can be significant. And so if you apply for Social Security at age 62, you will enjoy these benefits at a time when they may allow you to meet more of your lifelong goals, whether it’s going on a month-long backpack or a walk in national parks in a motorhome.
Pro No. 2: You may receive more lifetime income from social security
Delaying your social security claim means taking a bet – that you will live long enough to come out with more money in your life by waiting to file an application. If you start charging benefits at the age of 62 but do not live a particularly long life, you may end up receiving a larger lifetime benefit than you would have by waiting.
Con No. 1: You want to cut back on your monthly benefit
For every month you claim Social Security prior to OFF, your monthly benefit is reduced. File at age 62 and you will look at a 30% reduction if your FRA is 67. It’s a huge hit and one that may force you to reconsider your retirement lifestyle.
Also, if you end up living a longer life, an early social security requirement can result in you receiving less overall living income from the program. It comes on top of a lower monthly benefit.
Disadvantage # 2: Early filing can indirectly result in a faster depletion of your nest egg
If you apply for social security at the age of 62, you may be inspired to leave the workforce at that time. But chances are you will not be able to live on your monthly social security benefit alone – especially when it is significantly reduced. And so in that case, you may end up withdrawing from your savings at a relatively early age – and eventually depleting your ready eggs faster than you want.
Do you need to apply for social security at the age of 62?
There are plenty of good reasons to sign up for Social Security at age 62 – and plenty of good reasons not to. You need to carefully weigh the pros and cons before making your choice.
The $ 18,984 social security bonus completely overlooks most retirees
If you are like most Americans, you are a few years (or more) behind with your retirement savings. But a handful of little-known “social security secrets” could help secure a boost in your retirement income. For example: A single trick could pay you as much as $ 18,984 more … every year! Once you’ve learned how to maximize your social security benefits, we think you can retire with the peace of mind we’re all after. Just click here to find out how you can learn more about these strategies.
The Motley Fool has one disclosure policy.