3 reasons to claim social security at 62 and 2 reasons not to

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The earliest age you can qualify for Social Security is 62, and it’s one of the most popular options, with many retirees starting their benefits as soon as they can. While many experts recommend claiming at age 70, there are plenty of good reasons to start getting checks as soon as possible – although there are downsides as well.


3 reasons to claim social security at 62 and 2 reasons not to


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3 reasons to claim social security at 62 and 2 reasons not to


To help you decide what’s right for you, consider three big reasons to claim Social Security at 62, as well as two reasons not.



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Smiling grandfather with grandson on his shoulders.

3 reasons to claim benefits at 62

Here are some of the top reasons to claim Social Security at 62.

Gallery: 30 Biggest Threats To Your Retirement (GOBankingRates)

Most of the 10 cheapest states for retirement are in the South and Midwest, where the overall cost of living is particularly low. The five most expensive places - Hawaii, District of Columbia, California, New York, and Massachusetts - probably aren't shocking. However, there are a few surprises in the data, and the type of expenses you incur can affect how much you need to save for retirement in your state. For example, Maryland is the sixth most expensive state overall, but health care costs are among the lowest in the country. If you plan on frequent trips to doctors when you retire, Maryland might be a relatively affordable option, even as an overall expensive state. Likewise, Virginia isn't particularly cheap overall, but it has the second-lowest transportation cost in the country. Read on to see how much to save in each state if you want to retire early. Learn More About Retirement 4 Ways to Protect Retirement Savings from Inflation How Much Money Should You Really Save for Retirement? The Financial Habits of Millennials May Surprise You - Here's How Much They've Saved for Retirement Methodology: GOBankingRates Analyzed Consumer Spending Of Americans Aged 65 And Over - Based On Data From The 2017 Consumer Spending Survey from the Bureau of Labor Statistics (BLS), the most recent data available - to determine how much a person would need to comfortably retire for one year and 20 years in each state. The following expenses were factored into the final ranking: (1) annual expenses for groceries, defined as “food at home” by the BLS; (2) annual expenses for housing, utilities, and housekeeping, defined as “housing” by the BLS; (3) annual transportation expenses; (4) annual health expenditure; and (5) the overall average annual expenditure. These costs were then adjusted to each state's detailed cost-of-living index, taken from the Missouri Economic Research and Information Center's 2018 Average Annual Cost of Living Index. After calculating the total consumption expenditure, an additional savings cushion was calculated assuming that the total expenditure covers 80% of its budget (50% for necessities and 30% for discretionary spending), with the remaining 20% ​​for savings. All data and analysis included in this article is accurate as of the time of this study was conducted on May 17, 2019.

  1. You don’t have to worry about surviving your intended lifespan: Under the social security system, you will get the same benefits for life whether you claim them sooner or later as long as you live to your expected life span. If you survive the actuarial forecast, you will get more by deferring your claim. But if you die early, you will do better by claiming Social Security as soon as possible. If you claim Social Security at 62, you won’t have to worry about trying to beat the average.
  2. The purchasing power of services is eroding: Although cost of living adjustments (COLA) are built into the social security system to ensure that benefits do not erode, they are determined by a formula that is not a very precise measure of expenditure. seniors. Because they measure changes in the Consumer Price Index for urban and office workers, COLAs have not been high enough to keep pace with inflation in some key areas where people seniors pay most of their expenses. The result is that profits have lost about 30% of their purchasing power since 2000, and there is no indication that will change. If you want to start your benefits before inflation eats away at them further, it makes sense to claim them as soon as possible.
  3. You can get money while you are young and enjoy it: For many people, health problems start earlier than expected in retirement and prevent them from enjoying their money. If you’d rather claim Social Security while you’re still young enough to use your checks for travel or other fun things, it makes sense to start at 62. This can be especially true if claiming your benefits allows you to retire early when it would not be possible otherwise.

2 reasons not to claim 62

Here are two of the top reasons why a claim at an early eligible age may not be the best approach for most seniors.

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  1. Benefit checks will be smaller: Claiming at 62 means accepting smaller checks for life, compared to what you might have received if you had waited. Sixty-two is before full retirement age (which is between 66 and 67 depending on your year of birth). This means that you will be hit with early deposit penalties if you start your benefits so early. You will also miss the chance to earn deferred retirement credits. Early deposit penalties can result in a substantial reduction in your checks, reducing them by up to 30% if your FRA is 67 and you claim at 62.
  2. Most retirees do better while they wait: While claiming early means you don’t have to worry about missing out on benefits if you don’t outlive your intended lifespan, the flip side is you to do you have to worry about missing out on benefits if you live longer than the actuaries predict. This is actually the most likely outcome, as about six in ten retirees would receive more benefits for life by waiting up to age 70 to claim them. Since Americans are living longer than ever, there’s a very good chance that you’ll get lost starting your benefits early.

At the end of the day, there is no one right answer to whether to claim at 62 or wait. If you’d rather get checks earlier or think you’ll die younger, starting your benefits at 62 is probably the best solution. But you might regret it if you live well to 80 and are stuck with little checks for life.

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