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Offbeat3 great reasons to take Social Security benefits at 62

16:11  09 november  2018
16:11  09 november  2018 Source:   fool.com

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3 things that will make you feel better about Social Security It has a lot to offer. Here are a few positives you should know about.

Don't assume that waiting is better. There are lots of good reasons to aim for as early as you can.

Filing early isn't always a bad idea when it comes to Social Security . Here's when it pays to start collecting benefits as soon as possible.

3 great reasons to take Social Security benefits at 62© GETTY IMAGES Smiling older man holding tennis racket Chances are, Social Security will play a significant role in your retirement, which means you'll want to be smart about claiming benefits to get the most money possible. Though your benefits themselves are calculated based on how much you earned during your top 35 working years, that figure can change depending on when you initially choose to file.

Seniors get an eight-year window to claim benefits that begins at age 62 and ends at age 70 (well, technically, you don't have to file once you turn 70, but there's no financial incentive not to at that point). Right in the middle of that window is full retirement age, or FRA, which is when you're allowed to collect the full monthly benefit your work record entitles you to.

Why do so many people claim Social Security at 62?

Why do so many people claim Social Security at 62? Claiming early might not have been their first choice.

The only reason not to claim Social Security early is to avoid a reduction in benefits . But filing at 62 may not cause you to lose out financially in the long run. That's because Social Security is designed to pay you the same lifetime benefit regardless of when you initially file. The logic is that while filing at

Since 62 is the earliest age to take benefits , it happens to be the most popular age for filing. But doing so comes with one major drawback: reducing your It's for this reason that many folks are advised not to file for Social Security as early as possible. But here are a few good reasons to take benefits as

FRA, depending on when you were born, is either 66, 67, or 66 and a certain number of months. And while you don't have to wait until FRA to file for benefits, claiming ahead of FRA means reducing the amount you collect from Social Security each month.

The extent of that reduction will depend on how early you file, but if you claim benefits at 62 and your FRA is 67, your monthly payments will be slashed by about 30%. And unless you happen to undo your application and then file again at a later date, that reduction will remain in effect for the rest of your life.

This is why you'll often hear that taking Social Security at 62 is a bad idea. But here are three reasons why the opposite may be true.

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While Social Security retirement benefits get larger if you wait beyond your full retirement age, until as late as age 70, spousal benefits max out at full Of course, these are just three potential reasons you might want to claim Social Security at 62 , and there are many others. On the other hand, there are

The best reason to claim Social Security benefits at 62 involves a situation in which one spouse in a married couple has passed away. 2. To let your family claim benefits on your work history. Retirees used to have more flexibility in deciding when to take benefits and what impact their decision would

1. You're unable to work

You might plan to work well into your 60s and hold off on Social Security for as long as you continue to collect a paycheck. But as they say, life happens, and you may find yourself out of work earlier than expected due to either health issues or layoffs at your company. Either way, if you don't have income to count on from a job and your savings aren't enough to cover your expenses, it pays to start taking benefits as soon as you can to avoid falling behind on your bills and running into issues with debt.

2. You're in bad health

Social Security technically is designed to pay you the same lifetime total in benefits regardless of when you initially file. The logic is that, while filing early reduces each payment you receive, you also get a greater number of individual payments. That formula, however, only applies to seniors who live an average life expectancy. Therefore, if your health is poor and you have reason to believe you'll pass away sooner than your peers, it makes the most sense to start collecting benefits as early as you can.

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You also can maximize your Social Security benefits by being strategic -- especially if you're married. For example, if you and your spouse have had rather different earnings histories, you might start collecting the Don't assume that retiring early and collecting Social Security at 62 are not for you.

Why start collecting Social Security benefits at 62 ? There are a lot of upsides to retiring early and starting to collect Social Security benefits at 62 . It might not be feasible for you, but you may still be able to retire earlier than planned if you assess your situation and devise a saving and investing plan.

Imagine you're entitled to a $1,600 monthly benefit at an FRA of 67. Filing at 62 will lower each payment you receive to $1,120, but you'll collect 60 more payments. If you pass away around 78 1/2, you'll break even with about $223,000 in lifetime benefits, regardless of whether you file at 62 or 67. But if you only live until 74, you'll come out about $27,000 ahead in your lifetime by filing at 62 rather than waiting five more years.

3. You've earned the right to not have to wait

The logic behind waiting on Social Security is to grow your benefits. But if you've saved well all of your life and now want the money to spend on leisure, you might as well go for it. We never know what the future holds; just because you're healthy today doesn't mean that will be the case in three, four, or five years from now.

It also stands to reason that you'll have more energy to enjoy things like travel and entertainment when you're 62 as opposed to later on in your 60s. Therefore, if you can afford to take a hit on your monthly benefits and doing so will allow you to enjoy your golden years sooner, then you deserve to use that money when you please.

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Though your Social Security benefits themselves are based on what you earned during your 35 highest years of income, you'll only collect your benefits in Although taking Social Security at 62 means slashing your monthly benefits , it sometimes pays to take that hit and collect your cash sooner.

Because Social Security eligibility kicks in at age 62 , many seniors rush to claim benefits as early as possible. But there's a downside to filing at 62 : reducing your benefits by taking them ahead of full retirement age But these three reasons for filing early just don't. 1. You're temporarily out of work.

Don't believe the myth that filing for Social Security at 62 is always a bad idea. In some cases, it's a very good idea, and one that will serve you well financially in retirement.

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