Despite the fact that benefits are being reduced, here’s why filing for them early makes a lot of sense.
When it comes to enrolling in Social Security, you have a plethora of options to choose from.
Even though you can claim benefits as early as age 62, filing before achieving full retirement age (FRA) will result in a reduction in your payments that will last for the rest of your life, on a permanent basis.
FRA begins to operate at the age of 66, 67, or somewhere in between, depending on the year of your birth.
Furthermore, filing at the age of 62 will result in a monthly benefit that is 25 percent to 30 percent lower than the benefit you could have received had you waited until FRA was reached.
Despite the fact that it could result in a significant financial impact, claiming Social Security at the age of 62 can make a lot of sense depending on the circumstances.
Three instances in which filing early is advantageous — even if doing so implies accepting a reduced monthly income upon retirement — are described below:
1. You despise your job — and it’s causing you health problems.
Some people don’t mind their jobs and are able to get by just fine with their responsibilities. Others are lucky enough to be passionate about what they do.
However, if you’re in the opposite situation and really despise your job, it may be time to consider quitting — especially if your mental or physical health is being harmed as a result of your employment.
And filing for Social Security benefits early may be your best bet for achieving that goal.
Consider the possibility that your job has contributed to your elevated blood pressure and a variety of other conditions that could actually shorten your life expectancy over the past few years.
Are the benefits of putting your health at risk that great for a few extra years of income really worth it?
It’s possible that the answer is “yes” if you’re significantly behind on your retirement funds. For individuals who have accumulated an adequate nest fund,
it may be appropriate to file for Social Security benefits in order to lock in some replacement income, and then present your resignation once those benefits begin to arrive in your bank account.
2. You wish to go on a new professional route.
Even if the job you have is not hazardous to your health, it could still be a disappointment. You may also have ambitions to pursue a different profession, one that is more gratifying and pleasurable for you.
But what if that second career is likewise significantly less lucrative? You may not be able to make ends meet on such a significantly reduced income — unless,
of course, you file for Social Security and are able to use your benefits as a source of additional income.
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However, if this is the case, it may be worthwhile to file early in order to make the modification sooner rather than later. Considering how much time we spend at work, it is critical that we receive something worthwhile out of it.
And, let’s face it, if you’re 62 years old, you probably don’t have a lot of time left in the workforce. In other words, if you’ve ever wondered what it would be like to work as a private chef instead of an accountant,
filing for Social Security benefits early may provide you with an excellent opportunity to learn more about the field.
3. Your savings can provide you with the freedom to file your taxes whenever you choose.
If you are behind on your retirement savings by the time you reach the age of 62, you may want to consider delaying your Social Security application because you may require a larger monthly benefit to make up for a retirement fund that isn’t in the best of shape.
However, if you’ve saved a substantial sum of money to the point that your Social Security payments will constitute only a small portion of your total retirement income, filing for Social Security benefits early should not be a source of concern.
Consider the following scenario: you have accumulated a $3 million nest egg by the time you reach the age of 62, but you do not want to withdraw any funds from it just yet.
At the same time, you may be ready to call a halt to your professional activities or reduce your hours to part-time. Making a claim for benefits as soon as possible may make it possible to do so.
It may also provide you with more freedom to travel and engage in a variety of hobbies and activities while you are still relatively young, allowing you to make the most of your opportunities.
If you start collecting Social Security at the age of 62, the obvious disadvantage is that your monthly benefit will be reduced throughout your retirement.
However, in other circumstances, the risk is well worth it to avoid a catastrophe. It may also be time to petition for benefits if any of these scenarios apply to you, which will undoubtedly improve your quality of life in one way or another.
The $18,984 Social Security bonus that the majority of retirees fail to take advantage of
When it comes to retirement savings, if you’re like the majority of Americans, you’re a few years (or more) behind. However, a few little-known “Social Security secrets” may be able to assist you in ensuring a raise in your retirement income.
For example, one simple method might result in you earning up to $18,984 more every year… if you do it consistently! We believe that if you understand how to optimize your Social Security benefits,
you will be able to retire securely and with the peace of mind that we all desire.