62 is significant retirement age. It’s the earliest age you can file for Social Security. It’s also a popular age for seniors to file for benefits.
If you’re considering enrolling in Social Security as soon as you can, it’s critical to understand the implications. And it includes learning the basic Social Security rules.
1. Benefits May Be Reduced if You Don’t Have 35 Years of Experience.
If you started working in your early 20s, you may have 35 years or more of experience by the time you turn 62. If you took a long career gap to have children or started in your 30s to finish your studies, you may not have 35 years of job experience by the time you reach 62.
Why is that so? Your monthly Social Security income is based on your 35 highest-paid years of employment. This means that for every year in the top 35 when you don’t have earnings on file, your benefits will be zero.
Too many $0s, or even a single $0, can result in a decreased monthly benefit. That’s not good if you plan to rely largely on Social Security in retirement.
2. Early Claim Could Reduce Lifetime Benefits.
While you can join up for Social Security at age 62, that isn’t when you will receive your maximum monthly benefit based on your earnings history. You must file for full retirement age (FRA) to receive the full monthly benefit.
FRA is based on birth year. Your FRA is 67 if you turn 62 this year. So if you file for Social Security at 62, your benefit will be 30% less than it may have been.
3. Filing While Working May Result in Benefits Being Withheld
The SSA allows you to work and collect benefits. If you do so before FRA, you risk losing benefits if you make too much money.
You can earn up to $19,560 this year without losing your benefits. From then, $1 of Social Security is withheld for every $2 earned above the cap.
Those withheld benefits will be refunded to you after you reach FRA. Remember that collecting Social Security at 62 locks in a reduced monthly benefit. And working may not be worth it if you lose some benefits due to high earnings.
Observe the guidelines.
Once they turn 62, many seniors apply for Social Security. That’s not always a bad idea. But it’s critical to know the guidelines before making a call.
Most retirees ignore the $18,984 Social Security bonus
Like most Americans, you’re behind on your retirement savings. But a few “Social Security secrets” may help you increase your retirement income.
For example, one simple method might add up to $18,984 each year! After learning how to optimise your Social Security benefits, we believe you may retire with the confidence we all seek.