Should You Start Taking Your Social Security Benefits At Age 62 or Full Retirement Age?
Should You Start Taking Your Social Security Benefits At Age 62 or Full Retirement Age? Skip to content
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By Hank Coleman Date September 14, 2021FEATURED PROMOTION
Retirees are eligible to accept Social Security withdrawals as early as age 62 instead of having to wait until the full retirement age of 67, but you will receive a reduced benefit every month. So, should you accept the reduced befit that goes along with an early retirement? There are a lot of factors that have to be considered in your own personal decision to take the Social Security payments early or delay them if possible. Every employee in America pays 6.2% of his or her salary into the Social Security system up to a certain cap of your salary. In order to receive benefits, a person must have worked for the equivalent of ten years while paying into the system. The full retirement age used to be 65 years of age, but with the federal government’s struggling monetary shortfalls, the current full retirement age is 67 years-old. As mentioned earlier, you can withdraw a monthly pension from Social Security starting at age 62, but you will receive a reduction your monthly benefits. Your date of birth determines the percentage amount that you will receive if you accept the early benefit; this percentage rises the closer you get to the full retirement age before beginning withdrawals. So, when should you start taking Social Security payments? Obviously, the longer you wait, the higher the monthly paycheck will be. But, this also delays retirement. Consider these factors when making your decision:What Is Your Risk Tolerance
If you have a low risk tolerance, you might want to consider waiting to accept full payment when you reach the full age of retirement. Waiting will help to ensure that you will have a far less chance of running out of money in your Golden Years of retirement. Retirees with a higher risk tolerance can focus on a portfolio more heavily weighted in stocks rather than bonds and Social Security payments. This portfolio will enable them to make up for the lower Social Security payments if they are successful in their portfolio. Moreover, their tolerance will allow them to stomach the stock market’s up and down swings that will inevitably take place.How Long Do You Think You Are Going To Live
Thinking about how long you plan to live may seem like a very morbid question or thought to consider, but people who live longer may come out ahead by delaying their Social Security benefits until they reach the standard retirement age. A person who accepts a reduced benefit every month by choosing the earlier payout will continue to lose money over the course of a long retirement. People with a history of relatives living a longer life need to strongly consider waiting and receiving the full benefits. For example, a person who was born in 1948 will turn 62 this year. Taking Social Security retirement benefits at age 62 instead of that “group’s” full retirement age of 66 years-old would result in a reduction of 25% of payouts. If this person lived a full life expectancy of 77 years-old, the average benefit from $1,171 would be reduced to $878 or a loss of $292 per month. That would equal over $52,000 during your retirement years.You own shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market. And they’re a lot cooler than Jeff Bezos.
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