You may regret claiming social security at 62 if you live a relatively long life. William Schantz of Mid Atlantic Financial LLC says that the reason for that is that although you will receive benefits for a longer period of time, the total amount you receive will be less than if you had waited until full retirement age (FRA) or even until 70.
Of course, there’s no way to know exactly how long you will live, so you may want to err on the side of caution and wait as long as possible to claim social security. However, if you are in poor health or do not have a long life expectancy, claiming social security at 62 may be the best decision for you.
There are other factors to consider when deciding when to claim social security, such as whether you need the money to support yourself or your family or if you have other sources of income. Ultimately, it’s up to you to decide when claiming social security makes the most sense for your individual situation.
The Reasons Not to Start Collecting Social Security Benefits Early According to William Schantz
Social security benefits are a vital source of income for millions of Americans, especially retirees. For that reason, it’s important to understand when and how to start collecting those benefits.
While you can begin collecting social security as early as age 62, there are a few reasons why you might want to wait until full retirement age (or even a few years beyond that) to start receiving benefits.
1. You’ll get a bigger monthly check
If you start collecting social security benefits at full retirement age, you’ll receive the full amount of benefits you’re entitled to. If you start earlier, your benefits will be reduced by up to 30%.
2. You may need the money later
While it may be tempting to start collecting social security benefits as early as possible, doing so could mean that you’ll have less money later in retirement. If you wait to start collecting benefits, you’ll receive larger monthly payments for a longer period of time.
3. You may be able to earn more money
If you start collecting social security benefits before the full retirement age, your benefits will be reduced if you earn more than a certain amount of money from working. In 2020, that amount is $18,240. If you earn more than that, your benefits will be reduced by $1 for every $2 you earn over the limit.
4. You could delay retirement
If you start collecting social security benefits at age 62, you’re effectively saying that you’re retired. But if you wait to collect benefits, you can continue working and delay your retirement date. That could be a good thing if you’re not ready to retire or if you need the money.
Of course, there are some situations where it makes sense to start collecting social security benefits early. If you’re in poor health or need the money to pay for basic living expenses, starting benefits early may be your best option.
Final Word from William Schantz
William Schantz advises that it’s important to talk to a financial advisor about when to start collecting social security benefits. They can help you understand the pros and cons of starting benefits early, full retirement age or later, and how it fits into your overall retirement strategy.