Taking Social Security at age 62

[PERSonalTime]

Looking for people who have taken Social Security at age 62. Please explain why you decided to take Social Security at age 62 and also how this has worked out for you. Do you have any regrets? Do you wish you waited longer? DW is thinking about using SS as her "fun money" and doesn't want to wait additional years until FRA to get it.


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[frank]

How many years out would be the break even point compared to full retirement age? my wife has some health issues and I am trying to get her to sign up at 62 also.

 

[ejman]

Looking for people who have taken Social Security at age 62. Please explain why you decided to take Social Security at age 62 and also how this has worked out for you. Do you have any regrets? Do you wish you waited longer? DW is thinking about using SS as her "fun money" and doesn't want to wait additional years until FRA to get it.


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Both my wife and myself took SS at 62 for the following reasons:

1) I have no pension or other sources of income other than my investments, My calculations show that when the investment return from the money left invested is taken into account and a RR of 5-6% is achieved the SS at 62 comes out ahead.

2) The SS administration keeps saying that there will be a reduction of benefits of 25% or so starting in 2035 unless the program is changed. I am old enough to remember how difficult politically the last fix back in 1980 was to put into effect. This was at a time when the government more or less "worked" and was perceived by most people to be benign in nature. I'm afraid that those days are gone and I don't believe that the fix will be easy when there are lots of very powerful political folks for whom the goal is to eliminate SS as it currently exists.

3) The COLA aspect of SS can be tampered with by a Government that wishes to do so to save money

4) the Taxing aspects of SS can be tampered with by a Government that wishes to collect more money.

5) The generation that counted on SS as a solemn Government promise is heading for the cemetery at a rapid clip. Young adults today have no expectation of SS being there for them. Politically eliminating SS will get easier, not harder over time.

6) I like having as much control as possible over my own destiny, Reducing my personal resources ( i.e. my investments) by using up my own money between 62-70 counting on the promise of a Government program to take care of me in the far future is anathema.

 

[razztazz]

6) I like having as much control as possible over my own destiny, Reducing my personal resources ( i.e. my investments) by using up my own money between 62-70 counting on the promise of a Government program to take care of me in the far future is anathema.

Amen!

 

[athena53]

4) the Taxing aspects of SS can be tampered with by a Government that wishes to collect more money.

This is my biggest concern and an area I'm going to watch. I learned the hard way about taxation of SS when DH and I married and he started collecting SS (he'd turned 65). The tax bite on his SS will be a lot less now that I'm no longer working, but I think that when the numbers for SS start looking worse this is an area they'll mess with, making SS even more needs-based. I may file early if I think that too much SS will be taxed away when I'm 70.

 

[Another Reader]

I'm almost positive I'm taking it when I turn 62 in less than two years. Family history argues for taking it early as the correct bet. Already being on the dole will be more likely to shield me from whatever shenanigans the politicians pull to reduce the payout. It's a little extra fixed income insulation with no bond risk, but I will either pay down rental mortgages or invest the annuity, as I do not need it to eat.

 

[PERSonalTime]

How many years out would be the break even point compared to full retirement age? my wife has some health issues and I am trying to get her to sign up at 62 also.

While I haven't done the calculations lately, I think my DW's breakeven point is at least 10 years (age 72). However, everyone's situation is different depending upon their individual numbers.


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[43WorkYears]

I see that a lot of ss decisions are based on leaving a higher spousal benefit. That I understand, but if that is not a factor as your spouse will do well on their (her) own, how much does that change anyone's thinking regarding 62 vs 66 or whatever.


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[jjquantz]

I see that a lot of ss decisions are based on leaving a higher spousal benefit. That I understand, but if that is not a factor as your spouse will do well on their (her) own, how much does that change anyone's thinking regarding 62 vs 66 or whatever.


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This is a good question. DW and I will have essentially equal benefits and we are only one year different in age. I've run through some ideas but don't feel confident enough in my conclusions to share other than to say that my initial reaction is that we can treat them as independent decisions that will have little effect on the other, surviving spouse. That initial reaction is VERY tentative, however.

 

[rodi]

DH started SS at 62. For us it worked out to be the best solution because we have a pre-teen and a teenager... They can collect, as well, if he's collecting. (Something I learned about here.) This puts us well ahead of the game, financially.

I don't include the boys SS earnings in my income budget - because I direct it straight to their college savings. (I removed that spending item from my spending budget- and call it a wash.)

It's unusual to have minor children at SS age, I guess... One slight advantage to marrying and having kids at an "advanced" age.

 

[Andre1969]

Isn't the breakeven point, age-wise, 78 for most of those scenarios? To where, if you end up living past 78, you were best off waiting until 70 to take SS?

In my case, I plan on taking SS at 62. My reasoning is that taking it early will let more of my investments continue to grow, rather than having to cash them out early. And, I figure that if they do make any serious changes to SS down the road, they'll figure a way to screw those not on it yet, moreso than those who are already collecting.

I also figure that the earlier part of my retirement is going to be more useful, enjoyable, and productive than the later years, so might as well start spending a bit earlier, rather than hoarding for later.

 

[imoldernu]

For us, for tax purposes... instead of using savings, but more importantly, because of a fear of recurring cancer, and dying before getting the first dollar.
No regrets... at all. Now 16 years later, getting $25K (DW and I total). Haven't figured how much we might have been getting, but the $$ in savings account CD's back in the 1990's were earning good %'s.

"Bird in the hand..."

 

[43WorkYears]

I will agree with your decision based on what you said. It's a tough decision based on the many factors we all have. Stay well.


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[megacorp-firee]

IMO the real decision points are:
1) health and family history related (poor = take earlier)
2) financial situation (do you need the money to live comfortably?, yes = take earlier)

If you really think the government will take the benefits away, then you should go ahead and take it (bird in hand theory), but personally, after watching politicians over the last 6 decades, I don't think any majority group of them have the political guts to take it away from people we are getting or close to getting the benefit (most of us I would think). We (older folks) have a tendency to vote and be very vocal politically when stuff start to go 'sideways'.

 

[growing_older]

Thank you for your very frank post on reasons you favor taking SS at 62. While I agree with many of your concerns, here are my reasons for delaying as long as possible.

1) I have enough savings to get me to at least 70, but my calculations show that if I live unexpectedly long and markets are unexpectedly unfavorable, then I may eventually run out of money unless I get a higher payout from SS.

2) I have longevity in my family, so while I do not know how long I may live, I must plan at least for the possibility I last into the high 90's (or more if medical advances keep extending lifespans). In that case I also want to be sure I have enough to pay for quality care and not end up in some less desirable institution.

3) The COLA aspect of SS and the taxing aspects of SS can be tampered with by a Government that wishes to do so to save money, but so can aspects of my various retirement accounts. I want to be diversified between SS, IRA/401k, Roth/Trad, taxable/sheltered, investments/home equity and so on, so whatever happens I can still muddle through and not have the majority of my eggs in any one basket that political action could reduce in value enough to hurt me. I am also hopeful that a large senior lobby can at least somewhat contain any of these political take aways.

4) I need the years between age 62 and 70 to do as much Roth conversion as possible and with lower income in these years hope to get maximum benefits from my various tax advantaged savings programs.

5) I have no spouse or dependents and no opportunity to file/suspend or manage higher payout with spousal benefits games. I have adult children as heirs, but unless something catastrophic happens they stand to inherit enough to put them in good shape for their own retirements no matter when I expire. They will get enough in any case so I see no need to take risk to maximize their gain if I die unexpectedly early. I see no need to try to maximize their gain in any scenario. I already do not buy life insurance as it is superfluous.

6) I do not think of SS as a way to maximize my take from the government. I view it as a way to insure myself against the risk of living unexpectedly long. That is the ONLY scenario in which SS is significant in my planning. I have enough assets to live as I am accustomed and still leave assets to heirs for any other scenario. In those cases, I will have lived a lifestyle I wanted and will not care about my remaining portfolio as I will be expired. I already have enough assets to live the lifestyle I want and have the experiences I desire, without SS. Taking SS early or late will not result in my reducing or expanding my lifestyle. The only scenario in which I am at risk of running out of assets is if I live to a ripe old age, and using SS to generate maximum payout for life, plus the assets I will still have, covers that risk.

7) If I have to accept a bet on whether I live long or short, the only side of that bet I care about is the side where I live long.

 

[PERSonalTime]

DH started SS at 62. For us it worked out to be the best solution because we have a pre-teen and a teenager... They can collect, as well, if he's collecting. (Something I learned about here.) This puts us well ahead of the game, financially.

I don't include the boys SS earnings in my income budget - because I direct it straight to their college savings. (I removed that spending item from my spending budget- and call it a wash.)

It's unusual to have minor children at SS age, I guess... One slight advantage to marrying and having kids at an "advanced" age.

rodi,

How is it that the kids are getting SS? I wasn't aware that that could happen.


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[Katsmeow]

rodi,

How is it that the kids are getting SS? I wasn't aware that that could happen.

I can answer this. Briefly, if a parent is receiving SS then the under 18 (under 19 if in high school) children of that parent receive 1/2 of the parents FRA SS amount. If there are multiple children, there is a family cap on the amount of benefits.

My husband retired at 62 and took SS at that time as we had 2 minor children under the age of 18 at the time.

 

[PERSonalTime]

I can answer this. Briefly, if a parent is receiving SS then the under 18 (under 19 if in high school) children of that parent receive 1/2 of the parents FRA SS amount. If there are multiple children, there is a family cap on the amount of benefits.

My husband retired at 62 and took SS at that time as we had 2 minor children under the age of 18 at the time.

Katsmeow,

Thanks for the explanation! Btw, does the kid still get one-half of the parents projected FRA SS even if the parent takes Social Security at 62? (It seems like that's what you're saying).

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[In-control]

My SO and I are taking SS @ 62. I figure every $ that it contributes to our spending is one more dollar that does not come from my savings/investments.

 

[W2R]

I do not think of SS as a way to maximize my take from the government. I view it as a way to insure myself against the risk of living unexpectedly long.

+1 That is how I view SS, too.

Also, I was surprised at how fast the years from 62 to 66 passed. Now I am getting divorced spousal SS, while my own SS continues to grow until age 70 when I will claim it. I am sure the years from 66 to 70 will also pass unreasonably quickly too, and then I'll get my own, higher benefits.

 

[mathjak107]

the problem is while ss is really insurance it has become the sole support for many.

 

[jesaco]

Planning in taking it at age 62..Take the benefit while I am still "Living" rather than at age 70 where I might be just "Existing"...

Family history has it that men (like me) are either dead or bed ridden at age 70 while the women in the family are still strong and alert at over age 90.

 

[jollystomper]

I am seeing a lot more personal finance articles extolling the benefits of delaying SS until 70. It just struck me that those are being written for the many who (for whatever reason) have little or no other savings/investment/pensions and therefore must maximize their SS dollars.

If on the other hand you have no "requirement" to maximize the SS dollars then I can see taking it earlier to enjoy the income stream longer. Our current planning is to take it at 63, at that point pension+SS more than covers our normal living expenses and our savings/investments fully become our "chosen lifestyle" expenses.

 

[FIRE'd@51]

I took it at 62. The last thing I want is more ordinary income when I'm forced to take RMD's.

 

[marko]

My SO and I are taking SS @ 62. I figure every $ that it contributes to our spending is one more dollar that does not come from my savings/investments.

Got my first check last week @ 62!

As you say,
1) every $ I get from SS, I don't have to withdraw from my portfolio. "Saved" money grows tax free and likely at a greater rate than the SS growth.
2) it is taxed differently...and free of state tax so I figure about a $2500/yr pocketed even with the 87% Fed.
3) break even is about 78...I'll worry about it then and likely won't be spending as much..meanwhile, see #1.
4) "Get in now" before they change the rules!