Don't Claim Social Security at 62. Unless...
Joseph Rinaldi, Financial Advisor
Investor, Educator, Author, Board Member, and Mentor to Professionals and Students
There are very few reasons to claim social security at age 62, and even fewer good ones. Many people claim benefits at the age of 62 for reasons such as:
1) Necessity of money
2) They are no longer able to work
3) Wanting to collect the money and invest
4) Fear of social security collapsing.
5) Poor health
Most of these reasons have alternative solutions that will benefit you in the long run. First and foremost, Social Security will never fully collapse. It may be having financial troubles but as long as the government keeps collecting taxes, then a portion of that will always be going into the social security program. Also, many claim they simply need the money, so they have to claim their benefits. One to two additional years of work, even in part-time jobs can “do wonders for your nest egg” without ruining the dream of retiring and enjoying your retirement at a younger age. You are still young enough to enjoy retirement at a young age, but now with more money coming in to enjoy this retirement with. Another reason many claim their benefits at age 62 is that they want to collect their social security and then invest it. Not many people can beat the returns that they would receive if they were to delay claiming their benefits, at least on a consistent and regular basis.
The one argument that is hard to contest would be that of poor health but even then, there are some reasons you may consider delaying this choice. Every month you can postpone claiming these benefits, the more money you can collect to put towards bills, or in the unfortunate case that you die first, there would be a “larger survivors benefit for your spouse”. For example, If a person dies after beginning RMDs and their spouse is their beneficiary, they have to withdraw any part of your RMD for the year of death that hasn’t been withdrawn. They can then roll over the IRA balance to their own and begin taking RMDs based on their age each year.