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Thread: Social Security at 62?

  1. #1

    Default Social Security at 62?

    I've always planned to take my SS when I reached 62. But after looking at it from a different viewpoint, I'm not so sure.

    Delaying SS payments after 62 increases the eventual payment by about 5-7%/year until age 66 (8%/year after 66). This seems to me to be similar to receiving 5-7%/year (tax-free) on an investment. Not sure if I'm viewing this accurately.

    If I delayed my payments, I would withdraw a similar amount from my retirement accounts until I began receiving SS. It would be about 2% of my total retirement funds and I'm OK with that. The downside to this is that those retirement withdrawals would be mostly taxable, while SS would not be. So maybe it would be kind of a wash...
    I think I might wait until 63 and then reevaluate which way would be better for me.

    I realize everyone's retirement situation is unique. Lots of important factors like health, family, retirement account balance, etc...just trying to figure out which would be best for me.

    Thoughts, anyone?


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  3. #2

    Default Re: Social Security at 62?

    I plan to keep working past 62 if my health holds out. Looking at delaying SS as an investment, 5-7% looks great given my track record.

    As for taxes I think you need to look into that some more. I thought up to 85% of your SS is taxable depending on your income.
    Allocations as of COB Dec 28 : 100% S. | Retirement Date:Dec 2025
    Past Returns:
    2020 31.85%,2019 27.97%,2018 -3.36%,2017 13.10%, 2016 -1.79%, 5Yr Avg 12.61%

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  5. #3

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    Default Re: Social Security at 62?

    If you can achieve 5-7% a year at 62 with your benefits, why not take the money immediately and invest it? I caution that when you get to 62, your risk of life termination goes up pretty quick. So, I will take the money, from the investment I made contributions for 44 years, I want my investment to be mine to control as soon as possible.
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
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  7. #4

    Default Re: Social Security at 62?

    There are so many articles and calculations on the internet and youre right...everyone's situation is different and yours might change when you hit 62...like me, i'm still a ways out but I keep reading about it. Here's an interesting quote on an article.

    When you claim early, you also are subject to what are called "early claiming reductions." If you claim at age 62, your retirement benefit is 25% less than what it would be at 66. If you claim a spousal benefit at 62, it's 30% less than what it would be at 66. Don't ask me why they have different penalties; it's why we needed to write a book."

    3 ways to maximize Social Security benefits - Yahoo Finance

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  9. #5

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    Default Re: Social Security at 62?

    Good article below. Remember tax consequences too...
    Five strategies to get the most Social Security - MarketWatch

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  11. #6

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    Default Re: Social Security at 62?

    It's a personal choice. The only way to be sure what the right choice is, is to somehow determine how long you are going to live.
    Weatherweenie's Account Talk
    Teddy Roosevelt: Patriotism means to stand by the country. It does not mean to stand by the president or any other public official. Retired on November 30, 2023 with 30+ years of service.

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  13. #7

    Default Re: Social Security at 62?

    Social Security assumes you will die at about age 82. So if you wait until age 66 it will take you about 16 years to break even with your 62 yr old self who took SS early. If you wait until age 70 it will take you about 12 years to break even. The question is will you live past age 82? Also, would you enjoy the money more from age 62 to 70 when you're in better health than at age 82+? Another point is that you really should be retired at age 62 to take SS unless your earnings will be under $15K or so.

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  15. #8

    Default Re: Social Security at 62?

    Quote Originally Posted by Cactus View Post
    I plan to keep working past 62 if my health holds out. Looking at delaying SS as an investment, 5-7% looks great given my track record.

    As for taxes I think you need to look into that some more. I thought up to 85% of your SS is taxable depending on your income.
    Thanks. I was under the impression that only earned income (from employment) counted against SS income. Looks like I'll be paying 25-28% tax on 85% of my SS.

    Doesn't seem right that we pay tax on our contributions and then again when we receive our distribution.

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  17. #9

    Default Re: Social Security at 62?

    Suggest you read the following:
    Get What's Yours: The Secrets to Maxing Out Your Social Security: Laurence J. Kotlikoff, Philip Moeller, Paul Solman: 9781476772295: Amazon.com: Books

    Learned many facts and strategies plus a lot of things that apparently even Social Security
    customer service people aren't aware of.

    I'm gonna be 62 this July but I plan to wait as long as I can before starting Social Security.
    Each year of waiting increases monthly check approx 8%.


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  19. #10

    Default Re: Social Security at 62?

    Quote Originally Posted by Frixxxx View Post
    If you can achieve 5-7% a year at 62 with your benefits, why not take the money immediately and invest it? I caution that when you get to 62, your risk of life termination goes up pretty quick. So, I will take the money, from the investment I made contributions for 44 years, I want my investment to be mine to control as soon as possible.

    Let's put this into a little test on which one is better. 80% retirement at age 62 or 100% retirement at age 67?
    Lets just say someone will receive $20,000.00 at age 67 for a full SS retirement. at age 62 that same individual will only receive $16,000.00.
    $16,000.00 x 6 years = $96,000.00 (from age 62 to age 67)
    $20,000.00 x 1 year = $20.000.00 (start receiving SS at age 67)
    at 85 years of age, individual that pulled out SS at age 62 receiving $16,000.00 per year would have accumulated $384k
    at 85 years of age, individual that pulled out SS at age 67 receiving $20,000.00 per year would have accumulated $380k.

    This is not a true representation of what an individual will receive for their SS, however, I feel that it's good to do the math and see for yourself which one is more beneficial. For me, i will definitely going to take out my SS at age 62. Not just that i'm able to get to it earlier(with penalty), but because i know how to turn it around and hopefully get more return from it than the 5-7% some of us are hoping to get by leaving it in the SS system.

    Just food for thoughts
    Travelerlady

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  21. #11

    Default Re: Social Security at 62?

    Here's another take on the subject :

    Pull it at age 62, whether you need it or not...invest it if you don't need/want to spend it. Me ? I'm not looking forward to living until I'm 85 or 90...as some comedian said...what's that get you ? Three more years in the nursing home ???

    Assuming the Wife has enough to live on, until she passes, too (and that's a big assumption in your calcs !)...but now you have a "benefit" that's part of your estate, and can pass on to whoever you darn well please ! Can my heirs draw my or the Wife's SS benefits after we're gone ? I don't think so...

    As others have noted...everyone's "situation" is different...ya gotta do the math !


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