Five GOOD Reasons to File for Social Security at Age 62
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- Опубліковано 10 чер 2024
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When should you claim Social Security benefits - as early as possible or delay taking them? This is one of the biggest retirement decisions with lifelong financial consequences.
Today, Kevin walks through the top 5 reasons both for claiming early and for delaying benefits. He discusses how factors like your work situation, health, spouse's benefits, taxes, and life expectancy impact the best option.
Through a software illustration, Kevin shows examples of how the total lifetime payout amount can vary greatly depending on when benefits are taken.
The goal is to give viewers a balanced overview of the tradeoffs so they have the tools needed to make this personalized decision.
• Tax-Free Retirement In...
✅ Social Security Actuarial Tables: www.ssa.gov/oact/STATS/table4...
00:00:00 Introduction
00:00:55 How Social Security Works
00:02:50 We Underestimate Life Expectancy
00:03:57 File Immediately: Reason 1
00:04:44 File Immediately: Reason 2
00:05:09 File Immediately: Reason 3
00:08:28 File Immediately: Reason 4
00:09:21 File Immediately: Reason 5
00:10:58 Delay Social Security: Reason 1
00:11:38 Delay Social Security: Reason 2
00:12:52 Delay Social Security: Reason 3
00:13:57 Delay Social Security: Reason 4
00:15:00 Delay Social Security: Reason 5
00:16:01 Conclusion
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When are you going to claim Social Security? And why?
Also, one note I didn’t make clear in the video. If take your benefit early and then when your spouse applies you switch - it does reduce the benefit a bit. When your spouse applies, the SSA tops off your current amount with an excess spousal benefit. After your spouse applies, the new total amount = (your current benefit) + (excess spousal benefit). So in my example, the benefit would be $1,750 -- not the full $2,000. But, it still often makes sense to go ahead and claim that benefit. Maybe I'll do a UA-cam short on this.
I did so many scenarios with spreadsheet analysis on which age would be best for me and all it did was make my head spin. I finally just decided to cut it in the middle and am taking it at my FRA. (which is this year) And I am very content with my decision.
I am claiming at 62 , I am currently 61 and I am retired and my wife is still working , all our retirement money is locked up in her 401K until 2025 mid year when she turns 591/2 , my amount at 62 is enough to make our early years of retirement fruitful to do things we want without really worrying about cash flow ..
Claiming at 70 (in about 350 days!). I retired at 50 with relatively good tax diversification , but no Roth account. In early years of retirement I liquidated concentrated stock positions, and I have done 11 years of Roth conversions. In retrospect, I wish I had been more aggressive in my conversions (most years were to the top of the 12% but recently as high as possible without triggering IRMAA). I have made good progress though and now Roth is greater than traditional IRAs, and chance of IRMAA for any surviving spouse is greatly reduced. Thanks for your great content!
we are going to retire next year at 63 and take ss and then get ACA or COBRA till 65 havent decided i know COBRA is outrageous most likely but no keen ON ACA my wife has had 2 heart surgeries and paid almost nothing because of my employer insurance....
@@bruceeigsti5274 having slight hard time following what you are saying. Are you saying ACA will cost you more because your wife has had two heart surgeries?
I have decided to retire early. Turned 62 in December and plan to start receiving benefits in June. My reason is that I am a nurse and just can't do it anymore, both physically and mentally. My husband is four years younger than I am so I am able to go on his health insurance. We have no debt and do not go on trips or purchase big items. I do plan to stay PRN, work as needed, for a couple of months but I really just need a rest from the health care field. With my SS and his salary we will still be making a decent income. I have a modest amount in my 403B but my husband has quite a bit in his 401K. We also have a decent saving account. I just can't see myself working as a nurse until I am 67 or 70. I know some people do but I am not one of them that can.
Time to take care of you now after, I'm sure, many years of taking care of others! 😊
I’m a nurse as well. I retired at 55 and claimed my pension then. Claimed Social Security at 62 . That, along with the dependent benefit ,was a blessing for me as I have a child who is a minor.
If you have heirs, take it early to spend SS money and preserve your assets for your heirs. SS stops when you die.
If you have a wife and you die, she can keep getting your SS until she dies. Which a husband that waits and collects 30% more plus the income he made between 62 and 67 the wife is better off. When the man dies he won’t know the difference anyway, but the wife sure will.
Depends. In my case, I have to assume my younger, lower earning spouse who spent a lot years staying home caring for the kids, will outlive me. Delaying ensures she gets a larger, inflation-adjusted, guaranteed income stream for her entire life.
One of the few Best videos on UA-cam explaining why or why not you should claim SS early/late.
Thank you!
Best vid I've seen on the subject....Thank You!!!
Thank you!
Longevity is not one of the strong suites in my family. So, while taking SS early would be appropriate, I plan to wait till full retirement age to aid the payout for my surviving spouse.
I am with you on this. Since we don’t know the odds, I would go with a middle point 65-67. 😂
You’re leaving one important (at least to me it is) aspect out. What about enjoying the benefit at an earlier age while you can still do things like run, jump, travel, ski, zip lines, ATVs, jet skies. I can do all of it now at 64. Will I be able to do them at age 70? It’s possible but will I even want to? I don’t know. I do know that I want to and can travel, ride a horse, parasail and even skydive … now. If you get my meaning …
@@RickMartinUA-cam okay, if it’s a tool then I use it as I see fit. My current 2 pensions are inflation protected just as SS. But I wasn’t talking about just traveling, which I’m doing. I’m talking about my physical ability now compared to what it’ll be able to do 7 to 10 years from now. I wanna enjoy my life now with the added financial support of the SS benefit. More money when I’m quite a bit older (and more limited) doesn’t do me much good. I want to live to the fullest now. Does that make sense to you? I know we all have different priorities, mine is to enjoy the rest of my life now, not wait 7 yrs. for it.
He said, and I agree that taking SS early if you have good pension income makes sense for most
@@randolphh8005 I don’t remember that part. But let me go back and check. I was hoping he talked about the emotional aspect of when taking the money but he stuck to the financial mainly. I got my finger on the trigger right now, the form is complete, just need to hit Apply. But I want to be sure I want it now.
I agree, that is a good reason to take it earlier and I don’t see it talked about enough. I just started receiving at 63. I am having some doubts about my decision, but I try to remind myself of your point. Yes, I could have more per month in my 80’s, but what the heck am I going to do with it?
@@Observe555 Buy an assortment of chips and candy and watch Netflix all day … and the news? Funny you mentioned you started at 63, I believe you did the right thing, if you don’t need it maybe should open a brokerage account. And that’s another thing, if something happens to you at least you got something out the deal instead of Uncle Sam keeping it all. I’m 64 and have the form filled out, my plan was to started right at 64 (no particular reason other than is not too early nor full age), but I’m overseas and trying to time the call for SS for when I’m in the States next month. Any advice for me?
For those willing to hustle a little bit, you can use the direct deposit from social security to earn new checking account welcome bonus. I’d say it’s about $1000-$2000/year if churning 1 or 2 new checking account welcome bonuses each month, so an extra 10% today, vs waiting for higher social security payments later, but missing out on the reduced payments + 10% on the checking account welcome bonuses.
Will have to see as it gets closer but I think taking it early and building a pool of funds for legacy makes sense. If you don’t need it. A lot of people will need it in my opinion
good video my good man. social security is tricky Yes I would like to take social security at 62, even though I would only get about $1,400, but then, if I take money out of 401k, that would have me pay more taxes later. ANd the problem is ....well...no job now in my 50s . So it's gonna be tough. I still hope that jobs will pick up and would be no need to work at starbux at age 60..sheesh.
Another strong reason to take early is if you have any dependents. They are eligible for benefits and your spouse may be also. It’s quite complicated, but it can significantly increase family benefits, especially if they are able to pull off your record for several years. My wife started collecting at age 63 for this reason.
I’m doing the same thing. At 62 my daughter will be 11 and can collect half of my FRA until she’s 19 (she’ll still be in high school then). I urge you to check out the social security rules about how the accounts need to be set up when your children receive these benefits. They’re quite specific and somewhat strict. And could prevent any payback of unused benefits
@@TheK9Shepherd Actually, not that complicated. The money goes to the parent’s account, not to a child account. The parent is the payee. There are no requirements beyond that, except that the money goes to maintain the family. There is no payback of unused benefits. There is also a “child-in-care’ benefit that the spouse may be eligible for if they are retired and also providing child care. That money also comes off your record and is a spousal benefit that is not a deemed filing. However, there are age rules, and there is a maximum family benefit based on your PIA for all parties combined.
@@randolphh8005 I was reading publication SSA EN-05-10076 regarding accounts. When it comes time, this is how I'll be setting up the account. 🙂
Life expectancy tables have not taken the after effects of Covid-19, which has significantly reduced life expectancy, by some groups up to 2 years. However, you should look at your own health and family history and take that into factor. Don't be over optimistic on living to the average age, remember 50% die before and 50% die after, so enjoy it while you can.
Best video I have seen so far on this. For some ppl who have good savings and 401K, it seems to make sense to live on savings and 401K money starting at 59 1/2 to full retirement age. To take reduced amount at 62, it will tie hands at 401K income to $24,000 annually it appears. If something significant happened and you were to take 401K out between age 62 to FRA, you would be royally screwed on taxes. Expensive things tend happen unexpectedly at the worst time...house falls apart, uncovered medical, legal issues. The idea of waiting to help a spouse to get 100% of your benefit makes a lot of sense too. Please correct me if I am wrong...I am no expert, but a UA-cam watcher trying to figure out this complicated equation.
I plan to take my own benefit at 62 and, if my spouse dies before me, I'll switch as his survivor to his higher benefit. My husband already claimed his SS at FRA.
Your survivor benefit will be reduced by the same % as it is when you FIRST claim for a SS benefit. At 62, 30% reduction. There's no benefit to waiting until After your own FRA for Surviving spouse SS ( What your spouse was receiving ), or S.S. Spousal benefit ( Spousal benefit is1/2 AT FRA, otherwise the permanent reduction. Ie, at 62, spousal benefit is 30% less than the 1/2 of better income spouse SS)
at around 65, there isn't as huge a difference between age 65 and say a 67 FRA, for a surviving spouse as there would be from starting any Ss at 62... but NO additional benefit for a Surviving spouse to wait past their own FRA!! Hope that helps..ive been studying thus far a year. also am not a tax or SS or any other Professional!
I think of social security as longevity insurance, especially for whichever of my current "married filing jointly" outlives the other and so moves to "single filer" status. I plan to delay to age 70 and could not care less about a mathematical break even point. However, at any time if my financial outlook says I need additional income, I'll claim then.
Good take on it. Best explanation I’ve seen about taking it
hope u live past 70
@@bruceeigsti5274 I'll give it my best.
@@bruceeigsti5274 If I don't, it won't matter to me. However it might matter to my wife, because that will maximize her survivor benefit.
Great content! Thanks so much! If I’m going to be 70 on September 1st, in order to maximize my benefit, should I start my benefit in September or can I start in August because my birthday is the 1st of September? Thanks.
Are you trying to stump me?! :) Please verify, but since you were born on September 1, you would want to start your benefits in August, since that's the month Social Security would then count you as reaching 70. Social Security counts you as reaching your next age on the day before your actual birthday, so it would be August for you. If you were born in September on any day other than September 1, you would want to choose September as the month to start your benefits.
Thanks so much! That’s what I hoped would be the answer.
I will probably be taking benefits this year. I am a widow and at this time I need a steady income. Later on I will switch to my own SS but I will wait as long as possible. However, I am starting a temporary job that will last until the end of the year.
Does the model take into account any tax benefit for reducing your SS payment with your Medicare payment? This reduces the taxable amount of SS which should lead you to filing right at 65.
H Kevin, great content. One question about older lower earning spouse taking their SS at 62 now and then applying for spousal benefit later when younger higher earning spouse takes their SS, won't the spousal benefit be reduced because taking their own as early?
I saw this statement from SS admin which concerns me:
A spouse can choOse to retire as early as age 62, but doing so may result in a benefit as little as 32.5 percent of the worker's primary insurance amount. A spousal benefit is reduced 25/36 of one percent for each month before normal retirement age, up to 36 months.
If the full spousal benefit will be one half of my say $4,000 full benefit, if my wife takes her SS at 62 what would get spousal amount end up being with penalty of starting her SS 5 years early? TT
I didn’t word that well. When your spouse applies, the SSA tops off your current amount with an excess spousal benefit. After your spouse applies, the new total amount = (your current benefit) + (excess spousal benefit). So it’s not a full reduction, but it is a reduction.
Don't confuse "spousal benefit" with "survivor benefit." But yes, spousal benefit is reduced by filing before FRA, and does not increase by delaying beyond FRA.
I'm confused about the example of the one spouse getting $1000 and the other $4000. You said later you can then switch to the higher amount after a few years of taking the $1000 early. Can you explain? Are we both to get individual checks or is it just one? Thanks!
Watch my video on spousal benefits. I explain it more in-depth. It is slightly reduced if she claims her benefit early.
What about the news that SS benefits could be reduced because of the potential for it to run out of money? What are your thoughts on this? Thanks!
I made a whole video answering that question:
ua-cam.com/video/qP1lgt9c1aM/v-deo.html
I'm on track to retire early at 57 (2036), 1 year after the SS trust is expected to run out. I don't count potential SS income in my plan for this very reason. If SS is still an option later in life, we'll see if I can claim at late as possible since all 3 grandparents that I knew growing up lived into their 90's
You will still get SS even if the trust runs out as folks/employers are still paying FICA from their jobs, but it might be reduced 20%-25%. I think they will fix SS at the last minute (2033 or 2034) as many older people still vote. When you retire,, you can use your 401k (rule of 55) or a p/t job as a bridge to SS.
How about this scenario- draw early SS and invest it. bc you have other buckets to live off. I think you can beat uncle sam on year over year increase? Plus you can will that pile.
I have a video where I look into that.
@@foundryfinancial oh okay thx!- i will check it out!
Does a job pension qualify as earned income that would reduce your SS allotment if it exceeds this amount?
No, but you Social Security benefit might be reduced if you get a pension from an employer who wasn't required to withhold Social Security taxes. This reduction is called the “Windfall Elimination Provision” (WEP).
@@foundryfinancial Thank you
Wait, Early #4 - if the lower earning spouse starts their SS benefit early for them, a reduced benefit, then when they switch to the higher spousal benefit, then that spousal benefit will also be reduced, no? Not the full $2,000 in the example.
You are correct. I didn’t make that clear in the video. It doesn’t impact the spousal benefit completely though. When your spouse applies, the SSA tops off your current amount with an excess spousal
benefit. After your spouse applies, the new total amount = (your current benefit) + (excess spousal benefit).
@@foundryfinancial In other words, the spouse's own benefit is reduced by filing early, and the amount of that reduction applies to and so reduces the total spousal benefit.
@Sylvan_dB yes, but only from what the benefit would have been at FRA - so if her excess benefit over her benefit would be $750 - that amount isn’t reduced. But the overall benefit is. Does that make sense?
If I claim at 62, can I then switch to survivors benefits if my spouse passes after I start claiming my own?
If the amount is more than your current benefit amount.
@foundryfinancial our FRA is about the same, but if I take mine at 62, reduced, then he passes, then my survivor benefit, at his full rate, would be more than my reduced amount. So the question is really, would my survivor benefit be reduced because I took my own early? He waited 2 years to draw his, so for him, that was 16% more than his PIA. I understand I would only qualify for his original PIA, not the additional 16%, but his PIA would be about a thousand more than my 62 rate. And as long as he is alive, it wouldn't matter. But if he passes before me, then my household income would drop dramatically. And as he is many years older than I am, statistically speaking, he will go first. So I am doing all of my planning on my own income alone.@@foundryfinancial
SS take back if you work while collecting - there is no take back once you’ve reached full retirement age, 67 for most folks.
Correct.
? Can you claim Ss at 62 at still work full time overseas without penalty?
Your fra is what 67 you can work but bear in mind 2024 you maximum amount you can make is 22,000 per year anything over the government will take money back for every dollar over they take three dollars you will get this money back at your fra
Pension and spousal benefit will turn on.
If you watch Sarasota Tim you know that 62 is the time to take it he'll explain it to you real easy in simple math terms 😊
ST is a borderline idiot. He’s promoting claiming SS early because he doesn’t understand the math of any other scenario. If you want to live in a van down by the river then by all means follow ST’s financial advice.
Forgot those of us with child in care
Minor children or grandchildren can draw 50%of full retirement benefits each up to family max 😮
I have a whole video where I go much deeper into that. But good point.
SO, what would you do? I want to and can retire at 62 with pension, collect SS bens, plus work p/t. My question is: does the pension count as income towards that 22K limit?
Only wages count towards the SS earnings test. If your case, only the p/t job would count and the pension doesn't count. If you're serious about it, then track your p/t job annual wages while you're collecting SS. If you're getting close to the earnings cap, then reduce your hours or maybe go on vacation and don't work that week or two. As long as FICA was taken out of your job that you're receiving a pension from, your SS won't be impacted.
You should factor in the average age people enter a nursing home. Once you are in a nursing home they take all of your SSN and file with Medicare. After that it does not matter if your amount is high or low.
That assumes of course you don’t have Long Term Care insurance and no assets to self pay. But it can be part of your decision making process.
Most people don’t enter a nursing home! Especially for more than a month or two
@morenotas I have a video where I explore that question.
@@morenotas Claim Social Security Early and Invest? 🤔💰
ua-cam.com/video/uQlLWHDUPkg/v-deo.html
@@morenotas probably at 62, but will it also be taxed due to the pension? is the pension inflation adjusted? Is there a desire for a survivor benefit? Do you have health insurance before age 65?
When you have a child with a permanent disability would be another reason. Would make a good video to cover this.
…..Sarasota Tim approves this video! 😂
You’re the second person to mention this. I should go watch his video.
@@foundryfinancial
He’s an interesting fellow! Good channel
😂😂😂😂😂😂😂62 IS THE AGE!!!!!!!!! UNLESS YOUR SICK ON THE MIND!!!!!!!!
Question??? Say when you're 62 and take SocSec at 62, but you work 3 months. That 3 months you go all in on your 401k for one last $ spike into that 401k. Say you make 40k, but dropped 30k in a 401k pre-tax. Do they take your wages minus 401k, in this case 10k? Or is it top line wages of 40k for earnings test to tax your social security? 🤔
Don’t forget having a child who is a minor as a reason to claim at 62.
Only 2 sound reasons to take SS early: chronic illness, thus shortened life expectancy, and second, you flat out NEED the income right away. You're laid off in your 60s and the chance of getting another job is extremely unlikely.
Reason 6. You have a child when you are 50. So when you are 62, your child will get 50% of your FRA (PIA) Not what you get at 62. My child will get 8 years (96 months) of $1620/mo
Wish I could take mine at age 50
Is there ... anything else you wish to take at age 50 ?!? Keep working as the rest of us had to.