Reasons to Take Social Security Early at Age 62

When to take Social Security is probably the number one if not the number one question that we get asked here at Centennial Wealth. And it’s a huge thing to determine. Okay, how, when should I take it, right? And I wish I so wish there was some magical formula that I could put into place that would spit out the exact age that you need to take Social Security. But unfortunately, there just isn’t okay. It is a personal decision based on a whole bunch of different factors. You know, typically how it works here with current clients, as you know, we’ll crunch the numbers. We’ll sit down, we’ll go over, okay what does it look like if you were to take Social Security at age 62 versus waiting until age 65 and then full retirement age at 67, or maybe even waiting until age 70. And you know, what we found is the typical break-even point is somewhere between the ages of 79 to 81. So what does that mean? Well, if you think you’re going to live a long life after the age of 80 or so, it’s in your best interest to wait as long as possible before you take Social Security. Now the one caveat to that is is, no one knows how long they are going to live, right. So that’s why it makes it such a personal decision. And there are a bunch of different reasons why you should take it at age 62. So that’s what I’d like to go over with you today. So the first big reason that you should consider taking Social Security at age 62, is if you’re not healthy. Okay, this is a great reason to start it right away as soon as you get it. Because if you don’t think you’re going to live a long life, you’re going to be leaving money on the table. Right? If you delay your Social Security for five years let’s say, let’s say your Social Security at age 62 is going to be $1,000 a month. But then you wait until age 65 and you would get $1,500 a month. So that’s what a $500 a month difference, okay. Now would it be worth it to delay that out until age 65 if you’re not healthy? What if you don’t make it much past age 65? Then you’ve given up three years of taking that Social Security to gain not much if you pass away early. So that’s why, if you’re not healthy, you probably want to take Social Security as soon as possible at age 62. Another reason to take Social Security at age 62, is if it fits into your retirement plan. Okay? If you’ve crunched the numbers, if you’ve determined, hey I can retire at age 62 because I have pension, I have Social Security that I can count on and the withdrawals to meet up the income gaps from your portfolio is not going to be outrageous and you can make that work, then by all means, you can take it at age 62. I know a lot of different people are pushing, hey you need to wait as long as possible, but if it works into your plan that you can take it at 62, by all means, it’s a personal decision and you can take it. Right? Another option or another reason why you should consider taking Social Security at age 62 is for the spousal benefits. And this is a big one. We do this quite a bit here at Centennial Wealth. We go over these different options. And the big one is, making sure that your spouse is protected. Now the reason I say that is because, you know, typically you’ve got one spouse that is going to have a higher Social Security benefit and then the other spouse is going to have a little bit lower Social Security benefit. Typically in this scenario, it’s going to be in your best interest to have the spouse that has the lower Social Security benefit start Social Security right at 62 and then the spouse in the higher Social Security benefit, you can delay that for as long as possible. The big benefit for this is if one of you were to pass away, the surviving spouse gets the higher of the two Social Security benefits. So that’s a big factor when selecting when to decide to take Social Security. You know another thing to consider in that is, you know, if you both delayed Social Security for a number of years, that means that, you know, you both have to live a relatively long life to recoup what you’ve given up by delaying Social Security. So, if you’re married and you have two Social Security and one’s higher than the other, it’s often in your best interest to start one early at age 62. Alright, if you have any questions about Social Security or you want to crunch those numbers and see what might make the most sense for your situation, please don’t hesitate to give us a call.