Claiming Social Security at 62 permanently cuts monthly benefits by 30%, but the right claiming age depends on health, finances, and goals.
Poor health or a family history of shorter lifespans can make early claiming smarter, since more payments may outweigh smaller monthly checks.
During a market downturn, claiming at 62 lets retirees avoid selling investments at a loss to cover living expenses.
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Age 62 is the earliest age you can claim Social Security. And you'll often hear that doing so is a bad idea.
The reason? Filing for Social Security at 62 will permanently reduce your monthly benefits. If your full retirement age is 67, which is the case if you were born in or after 1960, filing at 62 will shrink your Social Security checks by 30% — for life. Depending on your situation, that could mean reducing your one guaranteed retirement income stream.
But that doesn't mean claiming Social Security at 62 is always a mistake. Your ideal claiming age should hinge on a number of factors. And in these situations, it actually makes sense to claim Social Security at 62 rather than wait.
One of the biggest advantages of delaying Social Security is receiving larger monthly checks for the rest of your life. But that strategy typically works best if you live long enough to enjoy those larger benefits.
If you have serious health problems or a family history of shorter life expectancies, waiting may not maximize your lifetime benefits. While claiming benefits at 62 will reduce your benefits, you'll also potentially get more individual payments in your lifetime so that you ultimately come out ahead.
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Of course, the tricky thing is that one knows exactly how long they'll live. But your health and family history should play an important role in your claiming decision.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
