{"id":4950,"date":"2023-01-12T00:00:00","date_gmt":"2023-01-12T05:00:00","guid":{"rendered":"http:\/\/staging-wablog.wiseradvisor.com\/blog\/uncategorized\/9-reasons-to-claim-social-security-at-age-62\/"},"modified":"2024-09-30T23:52:00","modified_gmt":"2024-10-01T03:52:00","slug":"9-reasons-to-claim-social-security-at-age-62","status":"publish","type":"post","link":"https:\/\/www.retirementplanning.dev-iac.wiseradvisor.com\/blog\/9-reasons-to-claim-social-security-at-age-62\/","title":{"rendered":"9 Reasons to Claim Social Security At Age 62"},"content":{"rendered":"

Social Security, officially called Old Age, Survivors, and Disability Insurance (OASDI), is a federal benefit program created to give eligible recipients a replacement income. The program’s beneficiaries include retired people, their spouses, and those with disabilities. To qualify for Social Security benefits, you must accrue 40 credits during your working years. Social Security benefits typically form a significant chunk of a retiree\u2019s retirement funds and directly affect the monthly sum you receive as long as you live. The general consensus is to delay collecting the benefits for as long as possible, since the sum you receive per month will be greater. However, you may need to claim your benefits before you reach the full retirement age due to unforeseen circumstances. The Social Security Administration (SSA) includes a provision for early withdrawal, allowing you to collect the benefits from the age of 62 itself. If you wish to learn more about Social Security benefits, and the implications of both delaying your benefits or collecting them from the age of 62, consult with a professional financial advisor<\/strong><\/a> who can guide you on the same.<\/p>\n

This article explores some of the common reasons to claim Social Security benefits early.<\/p>\n

9 reasons to collect Social Security payments early<\/h2>\n

1. You are running out of money<\/h3>\n

Many people take their Social Security benefits at age 62 for a simple reason \u2013 they need the money. You may need the money for your daily expenses, pay for unaccounted expenses, or even recover from a wrong investment decision. In such a scenario, claiming your Social Security benefits early can help you meet your needs.<\/p>\n

As per Social Security Administration, early withdrawal of Social Security benefits has been noticed during times of economic crisis. According to a report, in 2008 – 2009, the global recession forced 36% of enrolled men and 39% of enrolled women to draw Social Security benefits at age 62.<\/p>\n

2. You\u2019re in debt<\/h3>\n

It is wise to clear your debt before you retire. Repaying a loan while not having a steady income post-retirement can be highly demanding. Therefore, If you have high debt levels when at the cusp of retirement, it may be a good idea to use your Social Security funds to clear off the debt before you retire. In fact, if you have high-interest debt, it might not be worth waiting to collect Social Security payments because the monthly payments you receive later may not be as valuable as the money you would save by paying off your debt now.<\/p>\n

A debt-free portfolio is always better than waiting for larger Social Security savings.<\/p>\n

3. You\u2019re planning to start a business in retirement<\/h3>\n

If you are planning to start a business or engage in other business activities during your retirement, your Social Security benefits can be a valuable source of income. For example, you might use your Social Security benefits to pay for supplies or equipment, hire employees, or cover other business expenses. Additionally, you have the option to repay the borrowed funds to the Social Security Administration within the first year without any penalty.<\/p>\n

However, it’s important to carefully consider the potential risks and rewards of using your Social Security benefits for business purposes. While it can be a good way to generate income in retirement, it’s also vital to have a solid business plan and to be prepared for the challenges that come with running a business.<\/p>\n

Also see: Is Social Security Taxable<\/a>?<\/p>\n

4. You are dealing with serious health concerns<\/h3>\n

Social Security benefits are closely connected to the lifespan of the individual. While it is nearly impossible to predict how long a person will live, if you are aware of any health issues \u2013 terminal or otherwise \u2013 that may significantly reduce your lifespan, it is a good idea to cash out your Social Security benefits early.<\/p>\n

If you begin receiving benefits at 62 rather than your full retirement age of 66 or 67, your monthly payment will be roughly 75% of your full-age benefit.\u00a0 Consider this scenario \u2013\u00a0 If you were to receive $100 per month from Social Security at age 66, you would only get about $75 at age 62.<\/p>\n

Now, you will have to wait for at least four years to get the remaining $25 per month. But by beginning to collect Social Security early, you have earned $3,600 in four years despite the reduced monthly payment of $75. Therefore, if you are worried about not being around long enough to benefit from delaying your Social Security benefits, it is advisable to withdraw your Social Security at 62. Additionally, the sum from Social Security may also prove helpful in taking care of your healthcare needs and medical expenses.<\/p>\n

However, there is an exception to this scenario, if you have a spouse or a beneficiary who may benefit from your Social Security savings, you must consider delaying the withdrawal of benefits. If your Social Security payment value is higher than your spouse’s, then delaying Social Security withdrawal can leave your partner with a bigger survivor’s payment.<\/p>\n