January 6, 2022
  • January 6, 2022

The # 1 reason to claim social security at 62

By on October 15, 2021 0

Social security benefits can be claimed at age 62.

Most financial experts advise against doing this because starting checks as early as possible means accepting less monthly income. You see, Social Security is designed so that early applicants get less money each month but get more checks. Those who wait get a bigger check but get less.

In some circumstances, however, it is a good idea to start your benefits at age 62. In fact, in a particular situation, you will definitely want to apply for Social Security at the youngest age possible. This is what it is.

Applying for social security at 62 is the best choice in this situation

Applying for Social Security at 62 is the best choice if choosing this early filing age is likely to result in more lifetime benefits for your household. This can be the case in two main situations:

  • If you are not likely to live your expected life and you do not have a spouse who is relying on your spousal benefits.
  • If you are making an early claim to allow a higher income spouse to delay starting their own checks.

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If you are not likely to live your intended lifespan

In the first case, starting benefits as soon as possible would give you the best chance of achieving the highest possible income for life. You wouldn’t have to worry about living longer than actuaries expect for someone in your position.

Waiting to claim benefits may improve you if you beat the odds and live longer than expected. Once you’ve hit your breakeven point – the point where higher monthly payments make up for lost benefits – each larger monthly check leaves you with more income for life. The problem is, it can take over a decade to break even. If your health is not excellent, you had better start benefits at 62.

Now there is a caveat to this. An early claim reduces the spousal benefits your widow or widower would receive if you died first. The last surviving spouse receives the greater of your two benefits. If you were the top earner, you probably won’t want to reduce the checks your partner will receive by claiming early. This is just one example of how marriage complicates things.

If you allow a higher-income spouse to delay their checks

This brings us to the second reason claiming age 62 could maximize lifetime benefits. In some cases, you may want to start your Social Security checks as soon as possible to provide income for your household and allow your spouse to delay depositing their own checks.

If your spouse gets a larger benefit, it makes sense to delay their claim to maximize your combined lifetime income. Yes they or they wait, they’ll be able to avoid early deposit penalties that reduce the size of their bigger checks and may instead earn deferred retirement credits that increase the payment amount.

Maximizing the larger of the two benefits can mean a lot more income for your household during retirement, and it may be worthwhile to start benefits at age 62 to make this possible.

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