Social Security at age 62

[littleb]

I found out 2 of my relatives took social security recently at age 62 instead of full retirement age or older.

One of them said their FA told them ss is struggling and will not be around in the next 10 years or so. i have heard that comment for the past 15 years and it is still around.

Also, the break even point where you will receive same amount (Total Dollars) at age 75 etc. After that age your benefits will be higher if you elected the full retirement option.

So, I see different reasons why someone might take ss at age 62. Maybe if you are in bad health, longevity does not run in the family or you don't have the money to coast from age 62 to FR age.

What age were you when you took social security? Are there other advantages at age 62 vs full retirement age?

 

[jim584672]

A bird in the hand is worth two in the bush.

 

[HFWR]

What politicians might do notwithstanding, SS will "run out of" money in about 2035, so a bit longer than ten years.

 

[REWahoo]

What politicians might do notwithstanding, SS will "run [-]out[/-] short of" money in about 2035, so a bit longer than ten years.

FIFY

 

[Midpack]

I plan to take SS at age 70, because my family history suggests I will live long past the Soc Sec age break even of about 81 years old (chart included in link below) Sadly some people know from their own medical and/or family history they're unlikely to live past 81. We all have to weigh our probabilities. I'd suggest you search and read a few articles discussing the advantages/disadvantages of taking Soc Sec at 62-FRA-70, I've linked just one below, there are many more online.

As for Soc Sec solvency, while something may have to change, benefits may remain pretty much as is for many years. Some report Soc Sec can pay full benefits out to 2030-2035. And if/when a reduction takes place, it may not affect those who have already claimed benefits - it may mostly affect next generations. If existing beneficiaries are affected, I would assume it will affect all, beginning at 62 or 70 won't matter thereafter.

3 Reasons It's Smart to Take Social Security Benefits at 62 -- The Motley Fool

 

[Whisper66]

Current plan is for wife and I to take SS at 62.

Neither of us expect to be long lived. So good chance one or both of us won't make it far enough past break even point to be worth worrying about it.

Good chance one of us will die several years before the other. So good to collect our 1.5 (my SS + 1/2 of mine for wife) as long as possible before it drops to just 1.0. Basically one early death moves break even point later in time.

Any SS we use will lessen use of saved assets, leaving more for kids when we pass.

Have enough savings that if we don't need the higher SS to sustain us in our later years.

Those are our reasons but everyone's situation is different. Many use delay of SS to 70 as a insurance against outliving assets. That's really a good reason to consider delay IMHO. Just doesn't fit my situation.


Sent from my iPhone using Early Retirement Forum

 

[W2R]

What age were you when you took social security?

My plan all along was to take SS at age 70, because of some cases of extreme longevity in my family tree, because females statistically tend to live longer than males, and because of my desire to use SS as "old age insurance", so to speak.

Then I discovered that if I waited until age 66 (my FRA) and then claimed divorced spousal SS, my own SS would continue to grow from age 66-70 even though I was receiving divorced spousal SS during those years. This strategy either has or will be ending soon due to changes in SS law last year, but it was allowed in 2014 when I turned 66 and did it.

So, right now I am getting divorced spousal SS and at age 70 I plan to switch over to my own SS.

 

[athena53]

I'm 63 and retired; my family tends to live into the 80s and some beyond that. As the law stands now I can file for Restricted Benefits and get spousal only at age 66 while letting mine grow, so that's my plan. I'm well aware that taxation of SS benefits will only get worse, but it's still an income stream I can't outlive so I want to maximize it.

 

[RE2Boys]

63 years, 4 months,
Decided to take it as I had minor children and they get a monthly check also with no effect on my benefits. And because I'm hitting the peak spending years of my retirement with high school age boys soon going to college.

Also, since I'm subject to WEP, my current benefits are less than $400 a month, waiting doesn't amount to big dollar impact.

 

[travelover]

I'm old enough to still do a restricted filing, so plan is for DW to take it at 62 when I'll take spousal only, then full benefit at age 70. When I die, she gets my benefit.

 

[imoldernu]

Need a crystal ball to figure it out...

We retired in '89 at age 53, interest rates were high, so much of our cost of living came from interest on our nest egg. In 1998 when we became eligible for SS at age 62, we took it. This kept much of our capital intact and growing.

I suppose if we had been smarter, we might have calculated the pluses and minuses, but it looked like a better choice, as we didn't expect to live long enough for there to be a difference. Now, at 80, in retrospect, we might have done better, but are to lazy to figure out the "might have beens".

In any case, no regrets. It all worked out well, as we're in pretty good shape for whatever the coming years may bring. Not rich, but not worried.

We've been at low interest rates for such a long time, that many have forgotten what savings accounts were producing in the past. Rates of 6% to 12% on FDIC five year CD's made it easier to "invest" without risk.

It was a different time.

 

[mystang52]

I will be 64 this August. Original plan was to start at age 65.....or once I neared that birthday perhaps hold off one more year. I've posted here before that I have a chronic medical issue (a form of leukemia) but I have never needed treatment. Nevertheless I can't ignore my likely reduced life expectancy.
Well, I've been sick for the last 6 weeks, catching back to back viruses. This is the other issue with leukemia, having compromised immunity. I'm on the mend, but this bout has been an eye-opener and DW and I are revisiting that Social Security plan.
I'm not one to make rash decisions, so as of now we intend to start my SS at age 64 1/2. By then, we may change our mind but I don't think so.

 

[Walt34]

I waited until FRA at 66 to maximize what the spousal benefit will be assuming I exit first.

 

[redshift]

I plan to take SS around 64, perhaps earlier. DW took SS at 64. I will start even sooner if needed - I'm of the 'discretionary expenses may be lower after 75ish' school. Any over 75 folks that want to weigh in on that?

 

[akck]

Took SS at 62 in order to leave a bigger inheritance (would have to deplete IRA to replace income). Our plan indicates that we'll have more income than expenses once all income streams come online in about 6 years and this will last for 15-20 years. So our secondary goal was to maximize our inheritance to our kids.

 

[ABQ2015]

I'm a single female and my intentions are to take SS at age 62 in late 2017; however, I would consider delaying a few years and taking the balance out of my 401k if worthwhile. My 401k would be depleted by about a third if I delayed to 70. Given my family tree and current health, I see myself as living to my early or mid 80's but probably not my 90's. I will have a decent sized pension with COLA (okay it's a diet COLA) so am not overly concerned about running out of money in my old age.

One of my concerns is future means testing of SS given that increased Medicare Part B premiums start at an $85K AGI for singles - so better to take SS now before it gets reduced. I'm starting to perform calculations to determine impact of Roth conversions, delay in SS, RMDs, etc. on taxes and portfolio but the results have not been clear cut given that I'm automatically in a higher tax bracket due to the pension and single status.

Correction: 401k would be depleted by about 1/3 if I take SS at FRA but depleted by more than 1/2 by age 70 which seems too risky. This assumes I take 3 1/2 % out plus replace SS. Whether I would delay SS will also depend on how market is doing.

 

[oneill225]

The best advice that I have heard on this topic (and what I intend to do) is to wait until full retirement age (68 for me), but to start paying myself (from my existing investments) the amount we would have received at age 62 (starting at age 62).

This way you we can enjoy the cash sooner (when healthy and most active) while receiving the equivilent of an 8% annual return on our money (each year you defer, your SS benefit/payment increases approx 8%). You can look at this process as being similar to buying an annuity. The risk, of course, is that SS goes belly-up or pays some reduced benefit in the future, but I think anyone with a 20 or 30 year horizon is safe.

Giving my kids an inheritance is not our goal, so that aspect is not a factor for us.

 

[DrRoy]

I don't need the income early and DW and I are in good health so the plan is to wait until 70. We see it as a future inflation adjustment.

 

[Bir48die]

Wife took hers at 62 to help pay for health insurance. I'll take mine at 66.2 but will keep an eye on the markets. If a huge tumble then will claim earlier.

 

[marko]

I took SS at 62.

My primary reason was concern over the rules being changed at some point particularly against HNW folk. Take the money, run and hope for grandfathering was my motto.

My secondary reason was the realization that the break even was about 78 coupled to minor Fed and full state tax advantages vs taking it from my portfolio; I pocket about $4K a year in saved taxes for eight years.

If I live to 78 I'll be more than happy to start taking a 'loss' of sorts and I likely won't need as much cash anyway.

 

[HFWR]

62-ish here. My rough calculation is that I'll gain about $20/ mo for every month I wait, so I might postpone a few months, but working to 66 (my FRA) wasn't happenin'!

 

[LARS]

What politicians might do notwithstanding, SS will "run out of" money in about 2035, so a bit longer than ten years.

SS won't "run out of money". It will, however, exhaust its SS trust fund around 2033; and, will then only cover approximately 75% to 79% of SS amounts based upon estimated payroll contributions.

 

[pb4uski]

I found out 2 of my relatives took social security recently at age 62 instead of full retirement age or older.

One of them said their FA told them ss is struggling and will not be around in the next 10 years or so. i have heard that comment for the past 15 years and it is still around. ....

Well if they are living on SS that they take early at 62 then that means that they are not living on their savings or investments so the FA has more money to manage and earn fees off. I'm guessing that your relatives never considered that angle.

 

[littleb]

OP here.

I ran the numbers taking ss at age 62 and at full retirement age in firecalc and Fidelity Income Planner.

Both planners calculated 100% success with either option. However with Firecalc there was an average balance at the end of 16,000 more with full retirement age. (not much money in the big picture -- 35 years)

With Fidelity Income Planner if I take ss at full retirement age my success grade was 97. If I take ss at age 62 the grade went up to 102. The higher the grade the more likely the money will last throughout retirement.

This was very interesting since I have always thought ss at full retirement age was the best situation. I might take it at age 62 instead.

 

[pb4uski]

62-ish here. My rough calculation is that I'll gain about $20/ mo for every month I wait, so I might postpone a few months, but working to 66 (my FRA) wasn't happenin'!

As long as you recognize that you don't have to start SS when you stop working... many people live off of savings from when they stop working until they start SS.