Daily Traders Edge

3 Great Reasons To Take Social Security At Age 62

November 09
09:45 2018

Chances are, Social Security will play a significant role in your retirement, which means you’ll want to be smart about claiming benefits to get the most money possible. Though your benefits themselves are calculated based on how much you earned during your top 35 working years, that figure can change depending on when you initially choose to file.

Seniors get an eight-year window to claim benefits that begins at age 62 and ends at age 70 (well, technically, you don’t have to file once you turn 70, but there’s no financial incentive not to at that point). Right in the middle of that window is full retirement age, or FRA, which is when you’re allowed to collect the full monthly benefit your work record entitles you to.

FRA, depending on when you were born, is either 66, 67, or 66 and a certain number of months. And while you don’t have to wait until FRA to file for benefits, claiming ahead of FRA means reducing the amount you collect from Social Security each month.

The extent of that reduction will depend on how early you file, but if you claim benefits at 62 and your FRA is 67, your monthly payments will be slashed by about 30%. And unless you happen to undo your application and then file again at a later date, that reduction will remain in effect for the rest of your life.

This is why you’ll often hear that taking Social Security at 62 is a bad idea. But here are three reasons why the opposite may be true.

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