Collecting Social Security benefits at age 62

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PERSonalTime

Recycles dryer sheets
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My DW is contemplating filing for Social Security benefits at age 62.

Has anyone started collecting Social Security early at age 62? If so, do you regret it or do you think it was a good move?
 
Personally, I think one needs a reason to collect at 62. Either health issues or just cannot wait any longer financially. Personally, I'm going to hold off as long a I can (to 70) as long as both those issues are non-issues. My DW is older than me and will therefore have to make the decision first. Her situation is that if she waits until full retirement age, that's $550 more per month and another $615 if she waits until 70. Those are not insignificant amounts. Lay them out and ask you DW why she want's to file early.
 
Early SS was an important part of my semi-retirement. No regrets. Would rather have that income now, rather than more later. (I do not have a pension nor millions to retire on, but live comfortably on modest investments, PT work, SS and life in a low cost of living area).

IMO, there is most likely a 50/50 chance of dying before the break even point (in mid-late 70's), so, why not?
 
I took at 62. No regrets. I was nervous about it I guess. For me it was straight math (I think my break even was 83) and pros and cons on a piece of paper. On a side note but connected, Medicare is a few years out for me. I found an advantage to having Part B taken from SS. Under current law that deduction from a SS check lessons an across the board increase where a provision does not exist for self pay. I also found out I had a one year “do-over”. I could pay all back lump sum. No harm no foul. I went for a face to face interview to file. Have fun researching for your own situation.
 
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USA, thanks for the reply. I think her thoughts are it's better to get the money out and have fun with it rather than wait for more money later.
Her break even point is about 75, so that's a lot of years she could be having fun! Thanks for the side note regarding Medicare. Can you explain more the issue about the part B deduction?
 
As others have noted this subject has been discussed 28,212 times here so far and the consensus is "you have to decide for yourself". Do some research. YMMV

Took mine at 62. No regrets
Reasons? In no particular order:
-Break even is 84-ish for me (check your math, 75 seems low)
-That much less I need to W/D from portfolio
-Isn't taxed in my state 5.1%, IRA W/Ds are. Less Fed tax than if I W/D from portfolio. IIRC I pocket about $1700 a year in taxes for each early year.
-Worry of changes going forward (more aggressive means testing? Hope for grandfathering)
-Take the money and run mentality
-I hope to survive the break even point but you never know. If I do, the last thing I'll be worried about at age 83-86 is if I left money on the table.
 
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marko said:
As others have noted this subject has been discussed 28,212 times here so far and the consensus is "you have to decide for yourself". Do some research. YMMV

Took mine at 62. No regrets
Reasons? In no particular order:
-Break even is 84-ish for me (check your math, 75 seems low)
-That much less I need to W/D from portfolio
-Isn't taxed in my state 5.1%, IRA W/Ds are. Less Fed tax than if I W/D from portfolio. IIRC I pocket about $1700 a year in taxes for each early year.
-Worry of changes going forward (more aggressive means testing? Hope for grandfathering)
-Take the money and run mentality
-I hope to survive the break even point but you never know. If I do, the last thing I'll be worried about at age 83-86 is if I left money on the table.
Click to expand...

Same here, reasons as to why I'm taking it at 62 starting this year.
1. Protect my investments, which are inheritable and don't evaporate into smoke when I die like SS will.
2. Break-even point is up in the 80's because my portfolio will continue to grow and that needs to be factored in, not just the size of the checks that show up in my mailbox.
3. If SS is reformulated, I'll be left holding the short end of the stick.
4. I'd rather have the money while we are young enough to actually enjoy it, than later, even if it's more money later.
 
Research. A lot of people talk about and believe that if 2 earners are going to get SS, the lower earner can take early, while the higher earner waits to 70. That gives the best survivor outcome as I understand it. That is what I am thinking of ding when the time comes so far. Will likely depend on other resources situation as that time gets here.

Good luck!
 
The survivor benefit is the most consistently compelling reason to wait IMO. GPO & WEP devastate DW's SS benefits (including survivor benefit). So for me it really is actuarially neutral.

My plan is to evaluate it each year once I turn 62. There are a lot of moving pieces in my life, this country and the world. I do not have starting SS at 62 (or any age) as a keystone to our retirement plan.
 
PERSonalTime said:
USA, thanks for the reply. I think her thoughts are it's better to get the money out and have fun with it rather than wait for more money later.
Her break even point is about 75, so that's a lot of years she could be having fun! Thanks for the side note regarding Medicare. Can you explain more the issue about the part B deduction?
Click to expand...

Money is money.. regular money is just as fun as SS money....:) and now you are tossing Medicare questions into the mix..

Spend a minute or two using our search function and you'll find enough to read to keep you busy until bedtime...if you have a question that isn't covered in that multitude of reading come back and ask..I bet you cant find one.
 
PERSonalTime said:
My DW is contemplating filing for Social Security benefits at age 62.

Has anyone started collecting Social Security early at age 62? If so, do you regret it or do you think it was a good move?
Click to expand...

Pretty much everyone is happy with the age at which they started to collect Social Security. That applies when the starting age is 62, 66, 70, or anything in between. People like to think they made the right decision, and always come up with reasons why it was right.

Instead of polling for regrets, you might wish to read up on the reasons why you might want to take Social Security early or delay to 70. Then you can decide if any of those reasons apply to you.

My plan is to start collecting at age 70. If something unlikely occurs, I can always change my mind. I doubt I'll regret my decision.
 
The same reason people watch MSNBC or Fox.. Get the information that reinforces ones point of view.. Not a great way to make decisions. Look up confirmation bias and you'll get the answer.
 
I'd guess the reason you won't find many "regrets" is you'd be looking for people 80+ who are largely dependent upon SS. I just don't think there are that many like that here, eh? Not saying it's good or bad, it all depends on individual's situation and mindset. We really don't need it, it will be a great offset when the MRD's kick in, and I'm fairly optimistic about the good fortune we are enjoying of health. Hence we started on DW's lower benefit at 66 and will wait to goose it by switching over to my more generous base at 70.
 
If you can afford to delay filing and are married, it is by far best annuity money can buy. Younger people seem to think that death is always around the corner at age 70. Once you hit 60, 20-25 more years, if you are healthy, seem right around the corner. If you are always going to be in the 12% bracket and lower, and never pay fed or state tax on your SS, or if it is a small amount, like $1k/mo, then take it at 62. Why not? If you have health issues and realistically think you will not live to age 80 or 90, then take it at 62 and spend it. If you cannot stand the thought of actually using the money you have saved and invested for retirement in order to assure you a higher no sequence risk income, and the amount left to your heirs must be at the max always, then take it at 62.

But when in the 22% and up bracket, especially if you have a pension, and know that you will always pay tax on “only” 85% of your SS, and you have a veryblarge percentage saved in tax deferred, & actually want to USE your investments to enjoy life more plus make sure your less investment saavy surviving spouse has a maximum income in case of your death, (but you expect to live past 85 anyway, ) then it makes more sense to delay filing. I’ve run Firecalc, RIP and others as well as my own calculations and delaying allows me to have roughly a $4-5k/yr net higher income from day one at age 62, compared to taking it at age 62. But in my case, SS would go from a bit more than $25k/yr, to around $42-43k/yr at 69-70. The tax money I save from age 70 and up, from the lower RMDs and the higher income at a lower taxed amount, means we are not at all dependent on my investments for living money. Between both our pensions and SS alone we are above $100k. If my investments drop from 1.3M to 1M in order to delay, with $500k of it Roth and after tax, then having RMDs on only $500k is a cake walk tax wise. And I can invest with more confidence since I can ride out anything without taking a lifestyle hit.

Break even means nothing. I am surprised so many here on this forum even bring that up. Breaking even is betting on yourself to die early. Once you are dead, it matters not. If you live, it matters. I also am surprised so many here say things like “I want to keep my savings, because what it they cut SS, I would be at the short end of the stick”. Seriously? Does anyone really think the chances of losing their SS is greater than lising a major part if their savings in the stock market? How absurd. If you are conservatively invested in CDs and such, so you can’t lose it, then it is easy to show that delaying allows a net higher income immediately because money is fungible, and there is no sequence of risk. It is amusing that so many people say “it is actuarially neutral, so it doesn’t if you take it early”. If it is actuarially neutral, then why not take it later ? It makes no difference, right?

The fact is, SS is actuarially neutral for the entire popluous. Are YOU the same demographic as the average person? Do you have average health, average weight, average education, living conditions etc etc? Or below average so you don't expect to make it to 82? I doubt it on here. I know I am blessed to be born the way I was, and how I have faired over the last 60 years. I am a prime candidate to live to 90, especially considering past generations.

It all depends on many many factors.
 
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My mother collected early and lived to be 91, so mathematically it didn't work out best for her. She had enough assets to cover her expenses, but might have spent more if she had a larger SS payment coming in. Dad collected early and died at 81, so it probably was close to break even for him.

Actuarially speaking there is supposed to be no difference between 62 and 70, and everything in between. But that is factoring in the overall population longevity rates.

Each individual has to take their best guess based on their health, lifestyle and family history whether they think they will beat the longevity averages.

For those with plenty of assets, delaying until 70 can be good longevity insurance. For those with minimal savings, filing at 62 gives peace of mind that savings won't be depleted too quickly.

The reason this topic comes up over and over again is because there is no one right answer.
 
The biggest issue with finding the "best" decision is that one must assume the year of their death. None of us know when we will actually die. Make a 3 or 5 year mistake and the "best" choice is no longer "the best". The ages used usually come from actuarial tables. But they are the average lifespan and one has a 50% chance of living longer that those tables. For those of us who have spouses, 2 life expectancy assumptions must be made, reducing the chance of being right to much less than 50%.

I think for many of us here, arguably not the average SS recipients, since SS is only a part of our planned or actual income stream, the choice one way or the other may not make a significant impact on our retirement life. Thus, If we were able to answer this question from our graves, we would say "Our choice was right" whatever that choise was.

Of course, I may be wrong about that.
 
CRLLS said:
Thus, If we were able to answer this question from our graves, we would say "Our choice was right" whatever that choise was.

Of course, I may be wrong about that.
Click to expand...

My grand pappy would agree with you.

Like he used to say, "We never know if we made the 'right' decision until it's to late, but today we should make the 'best' decision we can" .
 
Filed at 62 and am happy. One other reason for us was my filing at 62 allowed DH to file a restricted application and collect spousal SS until he turned 70. We had Fido run their SS analyzer and for us my filing at 62 was most advantageous.
 
Perryinva said:
If you can afford to delay filing and are married, it is by far best annuity money can buy. Younger people seem to think that death is always around the corner at age 70. Once you hit 60, 20-25 more years, if you are healthy, seem right around the corner. If you are always going to be in the 12% bracket and lower, and never pay fed or state tax on your SS, or if it is a small amount, like $1k/mo, then take it at 62. Why not? If you have health issues and realistically think you will not live to age 80 or 90, then take it at 62 and spend it. If you cannot stand the thought of actually using the money you have saved and invested for retirement in order to assure you a higher no sequence risk income, and the amount left to your heirs must be at the max always, then take it at 62.

But when in the 22% and up bracket, especially if you have a pension, and know that you will always pay tax on “only” 85% of your SS, and you have a veryblarge percentage saved in tax deferred, & actually want to USE your investments to enjoy life more plus make sure your less investment saavy surviving spouse has a maximum income in case of your death, (but you expect to live past 85 anyway, ) then it makes more sense to delay filing. I’ve run Firecalc, RIP and others as well as my own calculations and delaying allows me to have roughly a $4-5k/yr net higher income from day one at age 62, compared to taking it at age 62. But in my case, SS would go from a bit more than $25k/yr, to around $42-43k/yr at 69-70. The tax money I save from age 70 and up, from the lower RMDs and the higher income at a lower taxed amount, means we are not at all dependent on my investments for living money. Between both our pensions and SS alone we are above $100k. If my investments drop from 1.3M to 1M in order to delay, with $500k of it Roth and after tax, then having RMDs on only $500k is a cake walk tax wise. And I can invest with more confidence since I can ride out anything without taking a lifestyle hit.

Break even means nothing. I am surprised so many here on this forum even bring that up. Breaking even is betting on yourself to die early. Once you are dead, it matters not. If you live, it matters. I also am surprised so many here say things like “I want to keep my savings, because what it they cut SS, I would be at the short end of the stick”. Seriously? Does anyone really think the chances of losing their SS is greater than lising a major part if their savings in the stock market? How absurd. If you are conservatively invested in CDs and such, so you can’t lose it, then it is easy to show that delaying allows a net higher income immediately because money is fungible, and there is no sequence of risk. It is amusing that so many people say “it is actuarially neutral, so it doesn’t if you take it early”. If it is actuarially neutral, then why not take it later ? It makes no difference, right?

The fact is, SS is actuarially neutral for the entire popluous. Are YOU the same demographic as the average person? Do you have average health, average weight, average education, living conditions etc etc? Or below average so you don't expect to make it to 82? I doubt it on here. I know I am blessed to be born the way I was, and how I have faired over the last 60 years. I am a prime candidate to live to 90, especially considering past generations.

It all depends on many many factors.
Click to expand...

This is a very thoughtful answer. It talks about things I have not considered like tax brackets, RMD, taxable SS, net cash flow, based on total income (taxable and non-taxable) . . . There was another answer that discussed Medicare part B. Is there a good calculator/web site that considers all those factors? Or, do you just have to get on something like RIP and make a lot of changes and iterations? I've changed my SS numbers on RIP, but I'm not sure it takes all those other factors into consideration.
 
My break even point is about 79 years using absolute dollars. For me, each one dollar delayed from SS is one dollar I have to withdraw from my IRA. Assuming a modest return, the break even point is extended to the early to mid 80s. If the government makes any changes, the break even point is likely to be pushed out even farther. I'm more than willing to take the risk and take SS at 62.

On the other hand, If I was still working delaying SS would be the easy choice.
 
Perryinva said:
If you can afford to delay filing and are married, it is by far best annuity money can buy. Younger people seem to think that death is always around the corner at age 70. Once you hit 60, 20-25 more years, if you are healthy, seem right around the corner. If you are always going to be in the 12% bracket and lower, and never pay fed or state tax on your SS, or if it is a small amount, like $1k/mo, then take it at 62. Why not? If you have health issues and realistically think you will not live to age 80 or 90, then take it at 62 and spend it. If you cannot stand the thought of actually using the money you have saved and invested for retirement in order to assure you a higher no sequence risk income, and the amount left to your heirs must be at the max always, then take it at 62.

But when in the 22% and up bracket, especially if you have a pension, and know that you will always pay tax on “only” 85% of your SS, and you have a veryblarge percentage saved in tax deferred, & actually want to USE your investments to enjoy life more plus make sure your less investment saavy surviving spouse has a maximum income in case of your death, (but you expect to live past 85 anyway, ) then it makes more sense to delay filing. I’ve run Firecalc, RIP and others as well as my own calculations and delaying allows me to have roughly a $4-5k/yr net higher income from day one at age 62, compared to taking it at age 62. But in my case, SS would go from a bit more than $25k/yr, to around $42-43k/yr at 69-70. The tax money I save from age 70 and up, from the lower RMDs and the higher income at a lower taxed amount, means we are not at all dependent on my investments for living money. Between both our pensions and SS alone we are above $100k. If my investments drop from 1.3M to 1M in order to delay, with $500k of it Roth and after tax, then having RMDs on only $500k is a cake walk tax wise. And I can invest with more confidence since I can ride out anything without taking a lifestyle hit.

Break even means nothing. I am surprised so many here on this forum even bring that up. Breaking even is betting on yourself to die early. Once you are dead, it matters not. If you live, it matters. I also am surprised so many here say things like “I want to keep my savings, because what it they cut SS, I would be at the short end of the stick”. Seriously? Does anyone really think the chances of losing their SS is greater than lising a major part if their savings in the stock market? How absurd. If you are conservatively invested in CDs and such, so you can’t lose it, then it is easy to show that delaying allows a net higher income immediately because money is fungible, and there is no sequence of risk. It is amusing that so many people say “it is actuarially neutral, so it doesn’t if you take it early”. If it is actuarially neutral, then why not take it later ? It makes no difference, right?

The fact is, SS is actuarially neutral for the entire popluous. Are YOU the same demographic as the average person? Do you have average health, average weight, average education, living conditions etc etc? Or below average so you don't expect to make it to 82? I doubt it on here. I know I am blessed to be born the way I was, and how I have faired over the last 60 years. I am a prime candidate to live to 90, especially considering past generations.

It all depends on many many factors.
Click to expand...



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