(In the United States, people can apply for Social Security Benefits as early as age 62. However, starting to receive benefits at age 62 has its drawbacks, which can shrink the monthly benefits you receive in the future.
The monthly Social Security benefit is determined on an individual basis. It is indexed for Inflation and is calculated based on your average monthly salary over the 35 years you earned the most. However, you don’t get the full benefit until you reach your true retirement age (FRA).
FRA is between age 66 and 67, depending on your birth year. If the FRA is 67, your monthly benefit will be reduced by 30% if you apply for Social Security benefits at age 62. Unless you withdraw your claim and pay back the benefits you received within a year, your benefits will remain at this lower level for the rest of your Life. This could make it more and more difficult for you to cope with your old age and enjoy the new freedoms you will have in retirement.
However, there are no absolutes. Fox financial experts caution that applying for Social Security at age 62 is not a reasonable option, however, in certain situations.
- Pandemic keeps you from working
Many people are forced to work from Home as the Communist virus (Wuhan pneumonia) becomes a pandemic. But if you are working in a job that cannot be performed remotely and are not yet eligible for vaccinations, it may be possible to apply for Social Security at age 62, leave your job, and stop putting your health at risk; or it may allow you to stop working for a while and return to the workforce when the pandemic is over.
In some states, only people 65 and older are currently eligible for the coronavirus (CCA) vaccine, unless there is an underlying health problem.
- You don’t have confidence in your longevity
Although applying for Social Security before the FRA arrives will cut into your monthly benefits, however, starting to take Social Security at age 62 may still give you more lifetime benefits. Let’s say you receive a full benefit of $1,500 per month at age 67 (when you reach the FRA), while filing at age 62 will only get you $1,050 per month.
If you only live to age 75, you would receive a total of $163,800 in Social Security benefits. If you wait until FRA to start taking Social Security and die at age 75, then you get a total of $144,000, almost $20,000 less than the previous scenario.
Therefore, experts believe that if you have health problems or any other reason to think you won’t live very long, it’s best to start claiming Social Security at age 62.
- Want to travel “safely” again as soon as possible
Due to the Epidemic, many people have put their travel plans on hold and can’t wait to get back on the road again. So by applying for Social Security benefits at age 62, you can put money in your pocket and be ready to get up early and embark on your dream trip as soon as it is “safe” to do so. However, it is important to note that this may not be the case this year.
So, it’s important to weigh the pros and cons of when to apply for Social Security – too early to start at age 62 or too late to start the FRA – and weigh the pros and cons to make an informed choice.