Should I collect social security at 62 or wait? This is a question that many people approaching retirement age ask themselves. Deciding when to start receiving social security benefits can have a significant impact on your financial well-being in the years to come. In this article, we will explore the factors to consider when making this important decision.
Social security is a government program designed to provide income for retired workers, as well as survivors and disabled individuals. The age at which you can start collecting benefits is known as your full retirement age (FRA), which is typically between 66 and 67, depending on your birth year. However, you have the option to start receiving benefits as early as age 62 or as late as age 70.
One of the primary factors to consider when deciding whether to collect social security at 62 or wait is your financial situation. If you find yourself in need of additional income to cover living expenses, starting benefits at 62 may be a viable option. This can provide a sense of security and help you manage day-to-day expenses during your retirement years. However, keep in mind that collecting benefits early will result in a reduced monthly payment, as the benefit amount is adjusted based on the number of months you delay receiving it.
On the other hand, if you have a substantial nest egg or other sources of income, waiting to collect social security benefits may be a better choice. By delaying your benefits until age 70, you can maximize your monthly payment by approximately 8% for each year you wait beyond your FRA. This can result in a significantly higher monthly income throughout your retirement years.
Another important factor to consider is your health and life expectancy. If you have a family history of longevity or if you maintain a healthy lifestyle, waiting to collect social security benefits may be beneficial. This way, you can take advantage of the higher monthly payment for a longer period of time. Conversely, if you have health concerns or a shorter life expectancy, starting benefits at 62 may be more suitable for you.
It is also essential to consider the cost of living adjustments (COLA) when deciding when to collect social security. Your benefits will increase annually to account for inflation, but the COLA is more substantial if you wait until age 70 to start receiving them. This can help ensure that your benefits keep pace with rising costs over time.
In conclusion, the decision of whether to collect social security at 62 or wait depends on various factors, including your financial situation, health, life expectancy, and long-term financial goals. It is crucial to carefully evaluate these factors and consult with a financial advisor to make an informed decision that aligns with your individual needs. By doing so, you can ensure that you maximize your social security benefits and enjoy a comfortable retirement.
