As you may already know, the Social Security Administration defines your full retirement age by the year of your birth, and it ranges between age 65 and 67. This is the age at which you can claim your full scheduled benefits, based upon your highest-earning 35 years of work.
However, some people decide to retire early, at age 62. By doing so, they accept a lower benefit check for the rest of their lives, but many people consider this to be an acceptable trade-off. Is claiming early Social Security benefits right for you? It might be, depending upon your answers to the following questions:
Can you still work? Social Security might have defined a retirement age for you, but that doesn’t mean you will be able to continue working until that date. If you’ve become unable to work, or cannot work in the capacity that you once did, you might now be earning much less than you did in the past. If you need your Social Security benefits at age 62, then it might be a good idea to go ahead and claim them. If you continue to work after claiming your benefits early, part of your checks could be withheld if you make too much money.
Do you really need the money? Remember that for each year you delay claiming your benefits, your eventual checks will grow by about 7 percent. If you’re claiming the money before you actually need it, will you be able to invest it in such a way that it grows at a faster rate? In most cases, the answer is no, so you shouldn’t touch your benefits just yet.
What is your life expectancy? Depending upon your own state of health, your parents’ longevity, and perhaps a few other factors, you might have some idea of your own projected life span. If it looks like you could live well past 85 or so, it usually makes more sense to wait until full retirement age – or even later – to claim a larger benefit. On the other hand, if you suspect your days are numbered, you might wish to claim your checks and retire much earlier.
Do you draw a pension? Some recipients of certain government pensions are subject to the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO). Under these rules, your Social Security benefits can be reduced or eliminated if you receive these pensions and claim your benefits early. Never make any assumptions about your Social Security benefits. Before deciding to claim your benefits early, call our office for a consultation. We can run the numbers for you, show you what to expect, and help you decide if this is the right path for you.
This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency
15041 – 2015/11/16
