slatten49 Loc: Lake Whitney, Texas

Maurie Backman

Social Security helps millions of seniors pay the bills in retirement, which is why choosing the right filing age is crucial. Though your benefits will be calculated based on your 35 highest years of earnings on record, the age at which you file will also dictate your ultimately monthly payout. If you file at full retirement age (FRA), you'll get the full monthly benefit your earnings record entitles you to. FRA is either 66, 67, or somewhere in between, depending on your year of birth. Delay past FRA, and you'll boost your benefits by 8% for each year you hold off, up until you turn 70.

There's also the option to claim benefits ahead of FRA, and the earliest age to do so is 62. For each month you file early, though, your benefits will be reduced by a certain percentage. If your FRA is 67 and you take benefits at 62, you'll lower them by 30%.

So you'd think that most seniors would be loath to file at 62, as it subjects them to the highest possible reduction in benefits. But oddly enough, 62 remains the most popular age for retirees to claim Social Security. The reason? Often, it boils down to not having a choice.

The upside of claiming Social Security at 62 is getting access to that money as quickly as possible. But many people snag those benefits early out of desperation more so than impatience. A good 60% of seniors wind up forced into retirement sooner than planned, according to Voya Financial. When that happens, and they don't have the savings to tide themselves over, they're forced to fall back on Social Security.

And make no mistake about it: Many Americans reach their early 60s without savings. At present, an estimated 42% of workers have no money set aside for retirement whatsoever. Anyone in that boat who loses a job in the early 60s, or is unable to work due to health issues, will have no choice but to file for Social Security the moment those benefits become available, even if it means potentially reducing them for life.

Of course, the problem is that seniors lacking in personal savings need more money from Social Security in their lifetime, not less. And if your nest egg is virtually nonexistent, claiming benefits early could mean sentencing yourself to a lifetime of poverty when you're older.

Since many seniors claim Social Security at 62 because they have to, not because they want to, one way to protect yourself from that possibility is to save reasonably during your working years. This way, if you do find yourself out of a job or unable to work in your early 60s, you might have the option to hold off on Social Security and grow your benefits rather than reduce them on what could be a permanent basis.

Saving a mere $200 a month over a 30-year period could leave you with a $227,000 nest egg if your investments were to generate an average annual 7% return during that time (and that's more than doable if you invest your IRA or 401(k) heavily in stocks). And $227,000 could very well be enough to tide you over for up to five years if you find yourself out of work before FRA rolls around.

Of course, filing for Social Security at 62 doesn't always work out terribly. If you're in the opposite situation of having lots of savings, you might claim those benefits early so you can enjoy them when you're younger. What you don't want, however, is to be compelled to claim them out of desperation, like so many seniors are.

https://www.msn.com/en-us/money/realestate/why-do-so-many-people-claim-social-security-at-62/ar-BBTbXg1?ocid=spartandhp

Fit2BTied Loc: Texas

Great article and I feel for those who must claim at 62. That's a sad situation.

archie bunker Loc: Texas

Well, I plan to work until I'm told not to anymore. It's all I know, and both of my grandfathers died within 3 years of retirement.

Not trying to be picky, but I received my W-2 yesterday, and it shows how much was deducted throughout the year, like the past 41was for social security. I don't consider it a 'benefit' at all. I consider it money taken from me against my will with the promise that I would get it back with zero growth.
Worse than that, they've been taking my money for all of my life, and when I do decide to 'apply' to get my money back, I'll get what they 'allow' me to have. Not a penny more.

I'll work till I can't and they'll keep taking my money.

Liberty Tree

Look at it another way. Let's say a person starts collection $1600.00 per month at age 62. Discounting any raise he might get in his SS in five years he will have collected $96000.00. If he had waited to see 67 he would be collectioning about $2000.00 per month. That is $400.00 per month more but he would have missed out on the $96000.00 he has already collected. At $400.00 per month it would take 20 years to rec**p it, meaning he would have to live to age 87.

BigMike Loc: yerington nv

I'm gonna store up about 500 cords of pinyon pine; 1000 or so ounces of silver plus some other cool stuff, gold we've panned over the years; jewelry Ma has collected; turquoise, opals, amethysts, fire opals and garnets we've dug up here and there over the years; pink tourmalines we found in San Diego county when I was a kid. A bunch of those and they are gem quality. They're mining the place now; iron meteorite fragments. They're worth bucks. I have a device I can pull behind my truck that's very efficient at finding them in our vast, flat dry lake beds. Haven't used it since 2004.

I'll break out the lapidary equipment and make stuff with the agates, jaspers, chalcedonies, onyx, chrysocollas, quartz crystals, geodes.

I'll make sure I raise lotsa good weed too!

I'll do all that, if God let's me hang around that long, 'cause I don't know what will happen with SS in the next 10 years. We may be on a barter system by then.

woodguru

I did it because it takes 18 years to make up the difference you would get by waiting.

Liberty Tree

See my earlier post. I reach the same conclusion.

slatten49 Loc: Lake Whitney, Texas

To no small degree, that was our thinking before retiring at sixty two & a half about seven years ago. We had prepared by putting aside a comfortably large amount, while also seeing to it we were debt-free prior to retirement. At almost seventy, we have yet to touch our savings/retirement funds, and are living very well off our combined social security checks and a monthly VA disability check. In looking back, we have no regrets at our decision to leave the work force at sixty-two.

To satisfy IRS requirements, starting this year, we are required to draw a certain annual amount from our previously tax-protected retirement funds. But our expenses, outside of utilities and groceries, are limited exclusively to discretionary spending.

Any expenses for kids, grandkids and great-grandkids all fall under discretionary spending.

I guess all this falls within the last paragraph of the above article.

Iamdjchrys Loc: Decatur, Texas

A "mere" $200 a month? Believe it or not, that's a sizable chunk of take-home pay for most, who tend to live pay-check to paycheck. Even if there are retirement savings arranged, such as with a 401(K), they often need to be dipped into for emergency needs (a broken water heater or medical emergency, for example), and there are hefty fees charged for doing so. Unfortunately, as you point out, many of us are forced to turn to Social Security to survive. I am personally receiving SSDI benefits, which will eventually be replaced by the Social Security Administration with Social Security benefits, and I have no idea whether that will raise or lower my income. Only time, with the vagaries of those in charge, will tell.

Fit2BTied Loc: Texas

Smartly done. One huge thing many fail to do is the debt-free part. Not doing that leaves many in for a rude awakening. So many folks are living on the edge, where a single large unexpected expense like a high deductible on a insurance claim or a major car repair will push them over the edge. Never want to be "that person", so I continue to work.

slatten49 Loc: Lake Whitney, Texas

An added bonus came when we sold our home in Austin...a booming housing market, and moved on to Lake Whitney in rural Bosque County. Bosque's being a much slower market for real estate, we found a home equal in square footage on a much larger piece of property for about half of what we profited on the sale of our old home, which we had owned outright. Plus, the new home sits right off the Lake

Life in retirement is good.

Fit2BTied Loc: Texas

Nice. We're still just outside Dallas. Momma say this is the last place she wants to live. I'd be up for 1 more move, but I only got 1 v**e. She's got 1 too, but as the Secretary of State, she's in charge of e******n results and no matter what I try when the v**es are counted somehow I come out on the short end of the stick.

slatten49 Loc: Lake Whitney, Texas

Understood. The Sgt. Major made the final decision on our move.

One last thing, GreaterAustin/Travis County has about 1.5 million people in about the same square mileage area as Bosque County, which holds a population of about 18,000. NO TRAFFIC

BigMike Loc: yerington nv

Gee...I couldn't even guess at the statistics where I live.

slatten49 Loc: Lake Whitney, Texas

Having been there, I'd guess between 2-3 dozen people in your greater metropolitan area.

Traffic is fairly minimal...to the point of non-existent