Early social security at age 62

Without crunching your numbers specifically, you get more from SS monthly if you wait longer before taking it. For a man in decent health, the optimum age to take SS based on typical lifespans is around 68. At 62, you will only receive 75% of your allowed payout. If you wait until 66, you will get the full payout, so if you get $2000/month at 62, you will get $2,667 at 66. For each year past that up to 70, the amount goes up 8%. Since that is for the rest of your life, waiting is a good deal. Do you need the money now?

An additional disincentive occurs if you have earned income before reaching full retirement age. Your SS benefit is reduced by half a dollar for every dollar earned over some certain limit. I seem to recall that limit is in the neighborhood of $15,000.

I am 62 and applied for my social security. Started getting my payments into my bank account this month. I also have a significant savings and don't need to get the full benefits at 67. Better to get the sure thing now than wait another 5 years.

One question - is this investment guaranteed to generate 60,000 a year? 12% a year is an excellent return, I highly doubt that it would be guaranteed.

My thought would be to wait a while to retire - unless you really really want to - and the $60k is guaranteed and you can live off that. To me, it would be better to work a few more years, have that $60k a year reinvested or used to pay off your mortgage. Then retire once your mortgage is paid off. That would make very comfortable living for retirement.

Besides Roger's excellent observation, the issue is what are you going to do with the money you get from taking SS early. If you are going to invest it and get 5-6% annually, it might be a good deal to take it early. If you are going to let it sit in a savings account, it is a terrible deal, unless you have specific reasons to take it early like improving cash flow to pay down debts. (If you have $10k in credit card debt at 18% interest, taking it early could save you lots, but that is a more complicated computation.) Paying down your mortgage is only a good idea if for some reason you have a high interest rate or you need to drop your mortgage payment to improve cash flow.

The end goal for social security is not to die rich, it is to not live poor. You don't want to not run out of money if you live longer than you expect. The real risk of taking a 75% benefit at 62 vs taking a 100% benefit at 66 is that you live to 90 and really wish you had that extra money each month. If you take the money early and invest it wisely, this is not a problem. If you doubt your ability to do that or have other earned income that will reduce your SS check, consider waiting.

He said he was going to use it towards paying off his mortgage.

One other thing to remember is health care - what do you do for insurance because I am almost positive that you do not qualify for until 65 so what will do for those 3 years?

Oh yeah. Some part of your SS benefit will be taxed as income. IRS publishes a helpful worksheet for determining taxability of SS income. Essentially, you start with 1/2 of gross SS benefit and add all other income from every source. If the total is less than $25,000, no part of your social security is taxable. Some part of your benefit will be taxable. You'll have to dig out the worksheet and see how much you lose for yourself.

It is true.



It depends. Your payments are reduced if you start withdrawing early. And the reduction is permanent.

If you wait until 70, your payments are increased.

You'll have to balance the eight years of early payments from cashing out at 62 against the higher payments you get from waiting until you are 70.

If you die early enough, cashing out at 62 was the better deal.

If you live long enough, the increased payments you get from waiting until you are 70 will overtake whatever you would have gotten in those eight years starting at 62, and so waiting will be the better deal.

I forget how long someone has to live before "waiting until they are 70" is a better deal than "cashing out at 62". Those calculations are probably on the internet somewhere.

If you were relying on Social Security as your only income I'd say wait until you are 70. But since you have a fair chunk of money in the bank, you can probably afford to retire early.

However, I'm not sure how good of an idea it is to retire while still paying a mortgage. How many years are left to go? You could afford it probably, but I bet it would eat into your nest egg more than you'd want it to.

I'd consider working until the mortgage is paid, and then retiring the moment the house is paid off.

Yeah, if only we knew how long we had to plan for. I would be in outstanding financial condition - if I don't live past Monday.

I think a good rule of thumb is that if you are relying primarily on Social Security for your livelihood when you retire, work until you are 70.

Also, work until your mortgage is paid off.

But if you have a large nest egg and your mortgage is paid off, then retire early.