62 is a somewhat common age to apply for Social Security for a reason. It turns out to be the earliest age elders are free to register for benefits. Many retirees know they cannot receive their full monthly Social Security income until they reach full retirement age—67 for those born in 1960 or later.
Still, the attraction of the money is what usually motivates retirees to register for Social Security as early as feasible. For the promise of a monthly check years earlier, they are ready to pay less each month.
Moreover, some people find it wise financial behavior to claim benefits at 62. Those who put off registering for Social Security run the danger of having less overall income from the program.
While some retirees would find it reasonable to collect Social Security at 62, it is not always the optimal approach for every retiree. Sometimes it’s a tactic that would seriously backfire.
Why does not always make sense filing for benefits at 62?
Thanks to a mix of Social Security and a sizable nest egg, some seniors find themselves well-off in retirement. Still, a lot of Americans have far less retirement savings than they ought.
Among 65 to 74 year olds, the Federal Reserve reports the median retirement savings amount as barely $200,000. At face value, that is a reasonable sum of money; but, over a 20-year (or longer) retirement, it is quite small.
Claiming Social Security at 62 is a challenge since many seniors require more monthly income to offset lack of savings. Those who retire in their 60s with several million dollars can most likely collect Social Security at any age without regard to their income one way or another. An early filing becomes risky, though, for seniors lacking money.
Additionally leaving some retirees short on lifetime income is claiming Social Security at 62. Those that take advantages early often wind up monetarily ahead even if they do not live very long. However, by registering for benefits as early as feasible, persons with longer lifespans often forfeit their Social Security payments.
And that relates to still another important matter. More monthly Social Security benefits assist guard against longevity risk.
Nobody knows how long they will live. Those with a family history of longer lives should, however, think about delaying Social Security rather than registering as soon as they turn 62, particularly if they find themselves in wonderful condition at the time.
One has to consider this carefully.
Claiming Social Security at sixty-two is not a uniformly horrible concept. It’s also not assured to be a smart idea.
Thus, it is rather crucial to give the choice enough consideration. Running the figures and considering the consequences of claiming benefits at various ages before filing an official Social Security application also help.