Should You Take Social Security at 62?

In
 / 
by Greg Smith
 / 
July 13, 2023
Should You Take Social Security at 62 (1)

Determining the right time to start receiving Social Security benefits is a significant decision that can impact your financial future. Here are some key points to consider when contemplating whether to file at the age of 62 or wait until a later age:

Reasons to Consider Filing Early at 62:

  • Increase Total Benefits: Although opting for early filing results in smaller monthly payments, it allows you to potentially collect benefits for an additional 8 years (from age 62 to 70).
  • Life Expectancy: If you anticipate living shorter than the average life expectancy (around 83 to 84 years), filing early might be more advantageous for you.
  • Financial Need: If you require immediate income and have limited retirement assets or lack an employer pension, starting Social Security early can provide the necessary funds.
  • Preserving Retirement Assets: By not tapping into your retirement savings too soon, a larger portion of your IRA or 401(k) remains available for your heirs or for your own enjoyment during later years of retirement.
  • Future Social Security Availability: If you have concerns about the future of Social Security and the possibility of benefits being reduced significantly, taking benefits early may provide peace of mind.
  • Spousal Considerations: If you are the lower earner of a married couple, it could be a wise decision for you to file early while your spouse postpones it until the age of 70. This strategy ensures that if one of you were to pass away at a younger age, the surviving spouse can inherit the higher benefit (survivor benefit) from the deceased spouse. Thus, it can be a beneficial outcome for both parties.

Reasons to Consider Postponing Benefits until 70:

  • Maximizing Lifetime Benefits: Waiting until the age of 70 allows you to receive the highest possible monthly benefit amount for the rest of your life.
  • Longer Life Expectancy: If you anticipate living longer than the average life expectancy (around 83 to 84 years), delaying benefits can be more advantageous in the long run.
  • Continued Employment: If you plan to work longer and do not need immediate additional income, postponing benefits until a later age might be a suitable choice.
  • Tax Efficiency: Postponing benefits can be attractive if you can rely on funds from an IRA with low tax rates to support your lifestyle until you file for Social Security. This approach can potentially result in lower Required Minimum Distributions (RMDs) in the future, leading to reduced taxation on your Social Security benefits.
  • Employment Flexibility: By postponing Social Security benefits beyond your Full Retirement Age (66 or 67, depending on your birth year), you can work without worrying about the Annual Earnings Test and potential penalties.

Maximizing Your Social Security Benefits

Ultimately, the decision of when to file for Social Security benefits is a long-term decision. It is crucial to consult with a knowledgeable financial advisor who can help you assess the advantages and disadvantages of each option and maximize your social security benefits based on your unique goals and circumstances.

Our clients benefit from compliance specialist Greg Smith, who is a holder of the National Social Security Advisor Certificate. Greg provides special expertise to clients when determining optimal collecting strategies.

If you don’t have an advisor or would like to learn more about our approach to financial planning, you can contact us by phone or via our website and an advisor will be in touch. Please visit missionwealth.com to learn more.

Financial Guidance For Your Life Journey

Talk with a financial planner about your next steps.
Contact Us Today

Guidance For Your Full Financial Journey

Through our comprehensive platform and expertise, Mission Wealth can guide you through all of life's events, including retirement, investment planning, family planning, and more. You will face many financial decisions. Let us guide you through your options and create a plan.

Mission Wealth’s vision is to provide caring advice that empowers families to achieve their life dreams. Our founders were pioneers in the industry when they embraced the client-first principles of objective advice, comprehensive financial planning, coordination with other professional advisors, and proactive service. We are fiduciaries, and our holistic planning process provides clarity and confidence. For more information on Mission Wealth, please visit missionwealth.com.

To meet with a Mission Wealth financial advisor, contact us today at (805) 882-2360.

00526206 07/23

Recent Insights Articles

There's Still Time to Fund an IRA for 2023 (Before Tax Day)

There’s Still Time to Fund an IRA for 2023 (Before Tax Day)

April 3, 2024
If you had earned income last year, you may be able to contribute up to $6,500 for 2023 up until your tax return due date,...
Tricia Top Women in Business

Tricia Fahnoe Named 2024 Top Women in Business by Pacific Coast Business Times

April 2, 2024
Mission Wealth is proud to announce that Partner and Senior Wealth Advisor, Tricia Fahnoe is honored among the 2024 Top 50 Women in Business....
Six Key Factors for Retirement Investments

Six Key Factors to Consider as You Plan Your Retirement Investments

March 27, 2024
There are six core inputs that every retirement plan must include. Learn the inputs and key details to make sure you’re retirement ready....