5 GOOD REASONS to File for Social Security at Age 62

In this video, I'll give you five

good

reasons

why you might want to consider claiming your Social Security benefits at the earliest possible age, 62. We will discuss the break-even point and I will give you five

good

reasons

why you may not want to claim at 62.    Welcome to Financial Fast Lane, my name is Lane Martinsen. Today I'll give you five good reasons why you might want to claim your Social Security benefits early, and I'll also give you five good reasons why you might not want to. So before we do, it's important that we cover some basics to make sure we understand how

social

security

works.   I'm going to make a comparison using a sample couple: we have John and Linda.

John's full retirement benefit and his PIA are $2,442.  I'm going to use in this example that his wife Linda will receive the spousal benefit, which is 50 percent of John's $1,221 benefit and I'm going to assume a COLA of 3 percent in all years. Now you want to know that everyone has a crossover point as to whether they claim early or late or somewhere in between. But in this example we are considering claiming early and delaying it until age 70 just for comparison. Now in this example, looking at this graph, you can see that the crossover point for her is 79 and eight months, 79 and two months for her, so normally it will be between 79 and 81 years old, that's really the range.

I know a lot of times people think the crossing point is much longer, but it's not. Age 80 is really the time when most people will reach the crossover point between claiming early and claiming late. Now, a really important concept to talk about here is life expectancy because how long you live is a really important factor in terms of what strategy you might want to use, right? Now what you don't want to use is the national average, the national average life expectancy in the United States is 17 years and 79 years. He is in the UK he is 81 years old in Canada he is 82 years old.

But there's a problem with average life expectancy because it takes into account all the infant deaths from birth, um, deaths from opioid overdoses, etc., all the bad things that can happen to you throughout your life are included in that national average, but if you have already reached 60 and are generally in good health, then your life expectancy is not the national average. This is my father and me. This photo was taken. He was 92 years old when he recently passed away at age 94. In reality, he was almost 94 years old and he had a very long and independent life, but the truth is that just a generation earlier, if he had been born a generation earlier, he would not have lived that long. 30 years ago, my father had an open heart and that preserved his life and he had a very long independent life, which is why we actually live longer today, the fastest growing segment of the American population is people of 85 years and older, let me think that that is the fastest growing segment of our population that is projected to be 28 years from now.

There will be a million Americans who will be 100 years old or older, so we definitely have an aging population, so be sure to consider life expectancy when making a decision. Okay, now let's do a comparison here. Well, this shows one side. The side by side comparison from age 62 to age 85 is fine, so the pink column is if you claim your

social

security

benefits at age 62 and then the purple column is if you claim your benefits at age 70. At 70 years old you will see that their payments will be much higher because they had obtained the delayed loans, but at 62 years old, although their payments are lower, they will have many more years of correct payments and, therefore, between 62 and 69 years old .

If we look at how much they have received in total up to that point, it is a quarter of a million dollars, exactly 249,000, what they had received before they turned 70. So that's a lot of money to take into account. Now, if this couple claimed at age 70, they didn't have that income, but now they have these larger payments and their breakeven point is at age 79, almost 80 years old. And from that moment on, they are going to have more money, so let's look at this table, so if this couple has a short life and a short life is defined as 75 years old, if you died at 75 and you compare the accumulated total, you'll have more money if you claim early at age 62, so claiming at age 62 would be the best option, in that case, then full retirement age shows the middle of the road and then, um, 70 would be the worst. option if you are planning to die at 75 years old   and now if you have a normal life expectancy the normal life expectancy is considered 85 years then you can see that by stating 62 you are leaving a good amount of money on the table   and then if you have a long life , that is Assuming you are 95, there is a really big difference in total accrued benefits, so if we look at this chart side by side, if you

file

d at age 70 and lived to be 85, you would have a total accumulated additional amount of 229,000 compared.

If you were to claim earlier, right, and then if you lived to be 95, it's a big difference, 703,000 more, by delaying when you started social security, but now I'll give you five good reasons why it's possible. that you want to claim. your number one early social security benefits, you want to preserve your retirement investments and allow them to grow better over time, so this is a really viable option, so if you're retiring and you may not be 62, but at some point before age 70, if you have an investment account and now you need to withdraw money because you need income and you start making withdrawals from your savings or your retirement accounts, that money will now be used and it can't be like that, no longer can grow over time, etc. you start to deplete your assets, so starting social security can allow you to keep more of those retirement assets and therefore can become a whole additional component that will apply to some people and not others, so There are times when it really makes sense to claim early because you want your investments to grow and continue to grow, so if you look at this crossover point chart again, if you claim 62 and your crossover point is 80, that means between all those years from 62 to 80 you will have more social security money it's only after that it starts to decrease, it's in those later years, so number two, you have a source of guaranteed income for life that you can't outlive, like a pension or an annuity, and again the reason why You could delay if you have any concerns about those later years and want to make sure you have money to cover you in your 80+ age range, but if you have already mitigated the risk of longevity with an annuity or you have a pension that has a lifetime income in addition to your social security and then you may know that those later years can be completely covered and you really don't have that much worry, that may be one reason why you may want go ahead and claim welfare. security benefits is fine too, number three is based on your health, you know, if you just don't expect to live to break even, that would be a very compelling reason to go ahead and claim number four early, it will change your benefit to a higher spousal benefit when your spouse

file

s, so it will apply to some people who have their own benefit, but it is less than the spousal benefit and therefore one spouse could claim their benefit for several years and then switch to the other. major spousal benefit number five, for whatever reason, you can't work past 62 and you just need the money, and a lot of times that's the case and you just need to take the money and claim 62.

So those five good reasons are now I'm going to give you five good reasons why you may not want to claim early. Number one is that you are still working and your income exceeds the income limit, so social security is for retirement and therefore if you retire, which they consider early before your full retirement age, then you will be penalized based on your income, so the income limit is nineteen thousand five hundred and sixty dollars as of 2022, so that means you can claim social security early, you can continue working and as long as your income does not doesn't go over 19,560, there's no penalty or problem, but if your income is over that then it's a severe fine - 50 of anything over that threshold will be penalized, so it will very rarely make sense to claim early.

If you're still working second, you won't be able to save adequately for retirement and you'll become very dependent on Social Security, so if Social Security is really going to be your main source of income in the future, that's one reason really. convincing not to complain. early try to work one or two more years let social security grow a little more maybe work two or three more years where you can save some extra money can be a really smart strategy and will give you more social security in the future number three, Your benefit is likely to become the survivor benefit for a younger, healthier spouse, so you may have the largest Social Security benefit in a married couple where that person may be in poor health and does not expect to live to reach breaking even and therefore claiming early maybe makes a lot of sense for them, but if the surviving spouse is going to inherit that benefit then that is a consideration, so you may want to delay the benefit of the surviving spouse may have a larger benefit number four, you have a Roth conversion plan over the next few years and are trying to manage taxes and do not want to increase provisional income, which will result in taxes on your social security benefits and also a possible signature . charges on Medicare and so you need to be careful if you're doing Roth conversions, which can be a reason to defer Social Security, and then number five is if you have longevity and you really expect to live a long life, that's also a reason. convincing reason.

Not claiming social security early is actually very complex and it is easy to make mistakes. If you want to do it right, there is a lot of money at stake and it will really vary a lot depending on your situation. Each person is unique and there are many things. of things to consider we now have a professional social security analysis report that is available through my company very comprehensive custom reports that will show you all of your specific strategies and the best options which you can access by visiting socialsecuritylane.com for more information . nominal fee, but I think you'll find it's worth it, so I hope you found value in this video, if you did, I hope you share it with others, please give us a thumbs up and I hope to see you in the next one. episode of the financial fast track that