3 good reasons to take Social Security benefits at age 62 – The Motley Fool

If you are a US worker eligible for Social Security, your year of birth will determine what the program considers your "retirement age" (FRA) – the time when you can apply for retirement benefits and start collecting monthly checks at the full level you earned based on your lifetime contribution to the payroll tax.

If you are not already contributing to social security, your FRA will be between 66 and 67. But you do not have to follow the government's retirement age guidelines. You can apply to start receiving your benefits from age 62 or up to age 70. The disadvantage of doing it sooner is lower monthly checks. The advantage of delaying: the bigger ones.

So when should you apply for social security? Well, the age at which the greatest number of people starts to collect is 62 years old. Despite these reduced benefit checks, it is still a wise decision. Here are three reasons why you might want to apply at age 62.

Reason # 1: It may not be worthwhile to delay

The table below shows how much your monthly retirement check will be thinner or bigger than the total amount of your benefits, depending on when you collect them.

Source: Social Security Administration.

These numbers might make you think that it is obvious that you should wait as long as possible, but that is not necessarily true. Delayed can give you bigger checks – but you'll get less.

As the Social Security Administration explains: "If you reach the average life expectancy of a person of your age, you will receive roughly the same amount in lifetime benefits whether or not you choose to start receiving benefits at age 62, at retirement age 70 or any age between the two. "

he can be reasonable to delay some scenarios, for example if you can afford to wait and if your medical and family history gives you reason to believe that you have a good chance of living longer than average. In addition, if your spouse's pension benefits are going to be much smaller than yours, you can aim to ensure that your checks are as large as possible, so that he can collect your most important benefits if you die first.

But for many people, delaying is not really worth it.

Reason # 2: You can not wait

Another great reason to start collecting your benefits at age 62 is simply because you need this money. Your retirement may start earlier than expected. According to the Transamerica Retirees Survey of 2018, 56% of those surveyed said they had retired earlier than expected, with 24% reporting a loss of employment, and 47% referring to health or family. related causes.

Without a regular salary, deferring your social security will mean that you will mainly live off your own savings, investments, pensions and any other source of passive income you may have. But millions of Americans have not spared enough, as shown by the following 2018 survey results:

Source: 2018 Survey on Confidence in Retirement.

Even if you are among the best prepared seniors, spending money for your checks so that you can do more important checks may not be the most careful plan.

Reason # 3: Enjoy retirement more

This is not because your finances allow you to delay the day you start collecting the social security you want. Indeed, the earlier you retire, the more you can enjoy. You will be younger, probably healthier and more able to participate in all the activities that will make you happy, whether it's traveling, hiking, playing tennis or golf, gardening or simply playing with your grandchildren. And after all, some of us will not live as long as we wish.

These are just a few reasons to start collecting your social security benefits sooner. So, before you start doing projects based on the idea that you will start collecting them late, take some time to review your reasoning – and remember that there are some other ways to increase your thinking. social security benefits at least a little, too.