Can you start collecting social security at age 62? This is a question that many people ponder as they approach retirement age. Understanding the options available to you regarding when to start receiving social security benefits is crucial in planning your financial future. In this article, we will explore the factors to consider when deciding whether to start collecting social security at age 62, and the potential benefits and drawbacks of doing so.
Social security is a government program designed to provide financial assistance to retired individuals, disabled workers, and surviving family members. The age at which you can start collecting social security benefits is one of the most significant decisions you will make regarding your retirement income. While the full retirement age (FRA) is currently set at 66 for those born between 1943 and 1954, you have the option to start receiving benefits as early as age 62.
Starting social security at age 62 offers some advantages. The primary benefit is the immediate access to income, which can be particularly helpful if you are in need of financial support or if you have other sources of income that are insufficient. Additionally, collecting social security at age 62 means that you will have a longer period to enjoy your benefits, as you will receive them for a longer duration than if you waited until the full retirement age.
However, there are drawbacks to starting social security at age 62. The most significant disadvantage is that your monthly benefit amount will be reduced. For each year you begin receiving social security before your FRA, your benefit is reduced by approximately 5% to 7.5%. This reduction is permanent, meaning that even if you decide to wait until your FRA or later to start collecting, you will not receive a higher monthly benefit to compensate for the early start.
Another factor to consider is the potential for increased income taxes. If your combined income (including your social security benefits) exceeds a certain threshold, your benefits may be subject to income tax. This threshold varies depending on your filing status and other factors, so it is essential to consult with a tax professional to understand the potential impact on your taxes.
On the other hand, waiting until your FRA or later to start collecting social security can result in a higher monthly benefit. The benefit amount increases by approximately 8% each year you delay collecting between your FRA and age 70. This increase is known as the delayed retirement credit, and it can significantly boost your retirement income over time.
In conclusion, the decision to start collecting social security at age 62 is a personal one that depends on your individual circumstances and financial goals. While there are advantages to starting early, such as immediate access to income and a longer period of benefit receipt, there are also drawbacks, including a reduced monthly benefit and potential tax implications. It is crucial to weigh these factors carefully and consider consulting with a financial advisor or retirement planner to make the best decision for your situation.
