Is Starting Social Security at 62 a Problem? Total Lifetime Benefits May Be Reduced; Get Expert Advice Before Electing When to Start Benefits

Share Article

Jim Ferguson, CPA, PFS, CEPA say claiming Social Security before full retirement age may reduce your family's lifetime benefits. All is not lost. There are several things that can be done to correct the problem.

Professional, Unbiased Advice

Fewer people are claiming Social Security at 62. In 2011, 26.9% of all Americans who were eligible to claim Social Security at 62 did so, says a recent report from the Urban Institute. This is down from 30.8% in 2009 and is the lowest ratio since 1976.

More people are realizing that claiming Social Security early may jeopardize future economic security. When applying for Social Security before full retirement age, the benefit starts out lower and remains lower for life. If married, this results in lower income for both spouses while both are alive, and lower income for the surviving spouse later in life.

Also, more people are continuing to work past age 62. This allows them to add to their retirement savings while deferring Social Security in order to collect a higher benefit later.

What can be done if Social Security is first claimed at 62 and it now appears to be the wrong decision? Well, there are a couple of things that can be done.. First, during the first 12 months, application can be withdrawn, repay the benefits received, and restart the benefit at a later date.

If the 12-month window has passed, all is not lost. If benefits started before reaching full retirement age and working, some or all of the benefits are being withheld due to the earnings test. At full retirement age, the benefit will be recomputed to give credit for those months in which no check was received. Between the ages of 66 and 70, beneficiaries may voluntarily suspend the benefit in order to increase Social Security benefits by 8% per year. Need help deciding when to claim Social Security benefits, or deciding what to do now if benefits have already begun claimed, please call us at 214-544-9050

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Jim Ferguson, CPA, PFS, CEPA
Visit website