Retirees have a choice about when they will claim retirement benefits from Social Security, but for most people, 62 is the earliest age at which you can start them.
As you approach this age and think about submitting for benefits, there are a few things you need to know before you trade so that you do not regret your choice. In fact, there are three reasons why you may wish you did not start your checks when you were so young.
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1. You survive your life expectancy
Social security is designed so that you theoretically receive the same income over your entire life, if you start receiving benefits early, apply for them late or start on time. Early filers get more checks, but each is smaller due to penalties for early filing. Late claimants get much bigger checks, but because they do not advance them until they are older, they get less from them.
But even though the program is designed so that it works as people live up to the life expectancy that actuaries predict, not everyone dies on schedule.
If you survive your projected life expectancy and claim your social security at 62, you will live each month beyond the time you have to earn a month on which you will miss out on extra income. Your total benefits for life can end up a lot lower if you get a lot of checks beyond the point you yourself have broken for benefits of delay.
2. You cannot pay for your medical care
Medical care is extremely expensive for many retirees, with some recent estimates raising the price to $ 325,000 in full retirement for a senior couple with high prescription drug needs. This is for out-of-pocket expenses, including Medicare premiums and medical expenses not covered by Medicare.
Many of these substantial health care costs are incurred late in retirement when your health begins to decline. Unfortunately, for many retirees, their investment account balance at this point is not very healthy after years of withdrawals. If you find that your savings are short and you struggle to provide expensive care, you may regret the fact that you claimed your money early and the size of your Social Security checks shrank.
After all, these benefits are guaranteed to last a lifetime and protect (to some extent) against inflation. Having a bigger check if you really need the money would be handy.
3. Your partner ends up with lower benefits of survivors
If you earn the couple with higher, then you can leave speaker in the disturbance as early as when you first die. This is because submission would mean 62 lower benefits of survival.
Since the death of a couple is a major financial shock to many retirees and often causes seniors to suffer a major decline in their livelihoods, you need to consider the impact on your loved one when submitting benefits for scheme.
In fact, for most married couples, it often makes sense for a lower earner to start benefits early when someone needs to provide household income, while the higher earner delay requires benefits as long as possible – ideally up to 70 – max out survivor benefits.
Think carefully about when to apply for benefits so that you do not regret your choice
Once you apply for Social Security benefits early, your income will be lower for the rest of your life, unless you file your claim. You do not want to go back and wish you had waited or regretted not considering all the consequences of benefits from start to finish at 62. You may decide that ASAP still makes sense, but it is important to know the disadvantages before making this choice.
