You left out one of the best reasons! Take it early to enjoy the money with your family, while you are still young enough to get around during your go-go years!
My dear baby brother died at 59 & never got to collect social security even though he worked hard his entire life..I started collecting mine at 62. No regrets 💙
I was forced into retirement by the CV-19 flu. My wife and I both lost our jobs. After two years I had had enough and got another full time job. I don't really need the money, though it is nice, but I need to do something besides leisure. I go to work singing. My dad retired at 66 and played golf for the next 20 years. That is a job I don't want.
I retired at the age of 61 back in Feb'24 with regrets and I'm not waiting until I'm 65 to collect Social Security, 4 months prior before I turn 62, I'm applying for , no if's but's about it.
1) I don't have any idea of my life expectancy. 2) I don't have a portfolio. 3) I'm single and 61. 4) I haven't any children. 5) I need it now. My Daddy used to say, before he left this cold, cruel world, ''Sometimes you just gotta get what you can get while you can get it.''
Your father's advice is practical and resonates deeply. In your situation, focusing on immediate needs and exploring your options is crucial. How are you approaching your financial planning given these priorities and uncertainties?
Waiting longer to get more is a lure the government made. All that money taken at 62 has to be made up to break even which will take years.. Most people will be dead by that time.
Why would someone put something so stupid on their head stone. In fact NO ONE puts ANYTHING on their own headstone. That is such an illfated comment! Many people LOVE their work and will never "retire". Retirement is for quitters! If you hate your job, get one you love. Wasteing your life away working at a job you hate is a fools errond. Try coming up with something original!
Good thoughts. I’m 54 now and had a triple bypass a couple years ago. My mom died at 62 from a heart attack so I HIGHLY doubt I’ll live past 70. So that makes sense to me to collect at 62. If my wife pulls it at 62 also, we can completely not touch our portfolio except for crazy vacations.
I applied for benefits at age 62 mainly because I just don't trust the crooks and monkeys who run the Congress to keep their hands out of it and not mess with eligibility requirements and/or other criteria (and which I'm sure is coming as the funding crisis gets worse with time) and didn't want the door slammed in my face when I needed the money. I decided to grab while the grabbing is good and don't regret it 1 bit. Also, despite what James said in this video (and his presentation here is actually pretty good), you still have NO IDEA as to exactly how long you're going to live because everyone's situation is different. I've known several individuals who had 'life expectancies' of 75 or more years, but died early due to unanticipated accidents or illness and received nothing. My true feelings are: You've paid into the fund, it's YOUR money, life is short, so eat your dessert first! And don't feel bad about doing it!
40 years of corporate America. I took mine at age 62. Then I cheated and filed for SSDI. It was a 3-year battle, but I won my SSDI. Getting FRB now. I have 1y left for my SSDI to turn back SSB. Downsize to Independent Senior Living. So I'm good.
I worked for 46 years and at age 62 I had enough savings on my portfolios and with SS and unions pensions I manage to paid all my bills and have some left over, and also I didn't wanted to push to full retirement age, I was a truck driver for over 38 years and the stress was getting to be a concern for my health now I feel good, better health relax and the good thing for anyone save before retirement just in case you need it. good luck all.
My uncle retired with no savings, just Social Security. At only $1,850 per month, he rents a nice 1 bedroom apt and has plenty leftover after bills. However, he retired in the Phillipines where his rent is only $350/month...including utilities!
I drove semi-tractor/trailer vehicles for a while but developed blood clots in my leg, had to quit. I know what you mean about the stress levels due to trucking. Can't *imagine* doing it for 38 years! Like I say to the military folks, thank you for your service, sir. Drivers are genuine public servants, even though they don't get the credit for it.
Congratulations on reaching a comfortable and well-deserved retirement! It’s great to hear that you’re enjoying better health and peace of mind. How do you plan to maintain your financial security and well-being as you continue enjoying your retirement?
Collecting smaller amount early versus collecting bigger amount later. Every calculation will show that the total accumulated amount collected between the two will be even at age 75.33. After that age, a person who collected at 67 will get more. The real question is, where will you be at age 75.5? If you pass away before the age of 75, than the person who collected at 62 beats you. And even If you’re still alive, the extra money that you will be collecting only means you will have extra money to buy more diapers in the nursing home. Or maybe, it will buy you extra massage from the nurse aide, since you will have extra money. But the years that you could have enjoyed early for leasure and travel while you can still walk and run, those years will be forever gone and you will not be able to collect those later.
Well said 😂. I retired with a pension at 55 and no debt. I've always been active and want to enjoy my abilities while I still can. I'll be taking my SS at 62. It almost seems like people think that taking it early, your money somehow vanishes into the ether. Take it early, spend some, save the rest/add to your portfolio. If you make it to 75 you'll still have that plus the earlier enjoyment with better mobility. Or maybe you get hit by a bus at 67.
@@340rps There is no way to make it up. The travel that they missed, the time that they could have spent with their families, the fun that they could have enjoyed during those years, the invitations that they declined because they have work, those are passed. Once they are gone, they cannot get them back, unless they have time machine.
I plan to start taking my SS at 62 mainly for your reason #2. Every dollar I get from social security is a dollar I don't need to take from my 401K so it can keep growing. Also I plan to leave a bulk of the money I have in my 401K to my son. When I pass away my son can't benefit from my SS but he gets to have what is in my 401K. I know I need to consider my wife but she has her own income stream to keep her viable.
I ll take it 62. Life is short and unpredictable. I don’t care a big money that I have to wait another 3-8 years. I d rather enjoy it as soon as I can.
I took SS at 62. A couple of months later, I maxed out all my credit cards as well. Sold my house and am now renting. I plan to spend it all in the next 4 years. Tomorrow is not guaranteed. Life is short and unpredictable. Enjoy it all now.
This is an important point. People are focused on how many years you have left, but not how many active years you have left. If at 62 you only have 5 active years left, do you want to waste them working or do you want to be out kayaking, hiking, and playing with the grandkids (or whatever your active lifestyle hobbies are)?
I collected at 62 and NEVER LOOKED BACK!!! I was working part time, home, and car paid for, no debt... I was used to living off my part time paycheck.. why let the government invest money I've paid in 40 years?? Nope, i drew early.. best decision ever.. for me..
Something I never see in these early vs late analyses is the cost of medical insurance being factored into the question. If you wait until you can collect full retirement you qualify for Medicare, but if you take retirement early, then You have to pay for you medical insurance out of your own pocket which decreases how much money you have available to spend on your other expenses.
So sure you get more a month at 67 but if you wait you miss out of $2k a month for 5 yrs that’s $120k. It’ll take you 3 yrs just to get to that $120k if you wait until 67, just take it early.
Your giving the Government $1000 per month of "your" money by doing that. Stupid. And you must have a good amount in savings. Because you sure aint' going to be able to survive on $2100 a month.
And and it will cost you out of pocket for the 3 years your own health care cost that can run hundreds of dollars a month . Can you afford that? Plus the hit you take on your month check and every year SS takes more and more for Medicare when you hit 65. Plus your additional supplement G plan. Hope you saved up enough.
I waited until I was 70…. I really enjoyed my job (registered nurse). I am in good health…..no issues and still very active. Did a lot of traveling (still do) fun trips and cruises……paid my house and car off……all my credit cards leaving only one to use….just utility bills to pay. Lots of traveling planned for the future…..and my SS right now is 3 times what it would be if I had retired at 62. Taking it at 70 was a positive thing for me all the way around. I also did major repairs to my house…..new roof and new heating /cooling system before retiring…..all paid for with no need to take credit for these…..paid in cash.
I'll take it at 70. I won't need the money before then and I'd rather have the max amount of SS benefits for the rest of my life as I expect to live a long time. I see it as a form of "insurance" that I won't run out of money before I die. Both of my parents are in their 90's and I am in my late 50's, in excellent health, and in great shape.
Your not even promised tomorrow. My papaw liked 1 month to retire at 70 he passed away at 69 and 11 months. You will regret it if the same thing happens to you.
#6 - Enjoy what remains of your life while you are in better health. Even if you are very healthy, you will be more-able to do things you enjoy at age 62 than 70 and have longer memories of those things. Dont just focus on the monthly $. I was fed-up, burned-out, and frustrated with work, so I planned 15+ years ahead to retire at 62, and I have zero regrets.
Biggest kicker is health insurance. I am 66 and my wife is 3 years younger with Krones disease. We are debt free with a pension. BUT without my job's health insurance, we would be toast!
My husband took his at age 63 and I just turned 62 in May, will receive my first pay this month, no regrets! They've had our money for 50 years, we both began paying in at age 15, we will gladly take our reduced monthly amount now.
Kinda bummed I’m just seeing the magic #62 since I’ll be 64 next month😂 Dang it!! Happy Retirement to everyone!!!! Enjoying your Golden Years is spot on.
Did the same my break even is 76 plus 2.months My wife is 61 and will get my benefit when I pass she will go from a $1300 benefit to a $4200 benefit for the rest of her life.
There is really no break even age. Unless you are strictly talking about total collected money. There is no way to make it up. The travel that they missed, the time that they could have spent with their families or with each ofher, the fun that they could have enjoyed during those years, the invitations that they declined because they have work, those are passed. Once they are gone, they cannot get them back, unless they have time machine.
Another advantage to pulling the trigger early on SS is it allows the portfolio to have more of a legacy transfer to heirs by taking pressure off earlier withdrawals from the portfolio and it allows your financial advisor to make a few extra bucks off the larger portfolio balance..
And you will pay more in taxes because of that strategy. There is no better way to pay less in taxes than to delay SS and drive down your retirement balance. The last thing you want is to take SS early with a 2 million dollar balance in your IRA and leave that to your heirs. They will lose half of that. Think about that.
I have several reasons to collect at age 62. First, my wife left me, second, all three children are over the age of 18, Three, the house must be sold, and the last reason is that my job is getting worst, asking me to do more every day. My actually most important reason is that I've seen a lot of people die at say 66 and didn't collect a dime of Social Security. I'm now 81 Y/O.
That's exactly the reason I plan to wait... because I don't know how long I have! Gene Hackman, June Lockhart, Jimmy Carter, Dick Van Dyke, Clint Eastwoord, etc., are all still alive! If I die early, I won't regret not taking it... because I'll be dead. And yet if I live to be near 90 or more, I would most likely regret not taking it every single day, for those last ten years of my life.
@@MrEdwardCollins….. Age 62 works for me as it will allow my nest egg to grow which can be passed down to the next generation…. I have ran Monte Carlo simulations for years now and this method is what works for us.…. That is the true beauty of the system is that everyone can adjust it to their own retirement needs.
Tomorrow isn't promised and for that reason I decided to retire at the ripe old age of 57. Thankfully my wife and I both have State Pensions, she retired at the age of 55. I am 2 weeks into my retirement and will wait until the end of the month before I make any major decisions such as trips, vacations, downsizing of our home, etc... My wife and I will draw my SS as soon as I am able to. Remember this, we can always make money but we cannot buy time.
Congrats. I retired at 52 and not a moment too soon. I say retire as soon as you can as your time alive is the most precious thing you have as it is indeed limited. You want to make that time as enjoyable as possible. You can "buy" some time though by living as healthy of a lifestyle as you can.
If you have government pensions you likely wont get much SS as you probably didn't pay into it while working for the "state". OR did you have 40 credits with private business? Even if you do the SS admins will cut some of your SS.
Great video James. Very informative and well presented. I totally agree with all you said. One rarely sees this type of advice online.... I really agree w/ #2 - investing your monies at 62. Once one passes on - SS stops (unless spousal) but you can build a great nest egg to pass along to your heirs or favorite cause - this is what I have done for the past 5 years. Be well.
I'm taking mine at 62. I have a company pension, seven figure 401K and my SS should be in the $2300 a month range. 40 years working in the refinery is enough. I've done my time. It's time to relax on my 40 acres and build my dream cabin there.
I dont know when my grandfather or father started collecting social security, but they both passed away at 71. If they waited until age 70 for a higher payout, they only collected benefits for a couple months after a lifetime of work.
#2 seems to be the key. Not taking SS early puts additional stress on your portfolio early in retirement, and there's still 20 years before the SS break even.
@@jacksummer854… Everyone will have a different situation in my case after running multiple Monte Carlo simulations over the years I am confident in taking social security at age 62.
I applied for survivor benefits at 65. My ex passed away at age 67. He collected SS benefits for 4 years. He retired at age 63 -- due to health decline issues. I have NO DEBT. Own my home. Own my 2024 vehicle (paid it off in 6 months). It's nice to NOT worry about finances especially at my age. ❤
@@robertstevens2030because waiting 8 more years isn't guaranteed that you'll even live that long and then you worked your whole life and collected nothing
5 Really Good Reasons to File for Social Security at Age 62 1: Your health is declining. 2: You no longer have to go to work. 3: You no longer have to listen to a Bat Ship Boss. 4: You can treat every day as a vacation day. 5: Read 1-4
Bravo, that is exactly how I explained to others. Besides, waiting to 67 or 70, it is 5 years delay and have to take time to make up the those who received in 62 collecting it. The number does not add up till at least 10+ years before it is ahead of the 62. Thanks for spending time to explain to those who trusted, but not doing the calculation nor thinking correctly.
@@robertstevens2030…. If you have planned properly taking social security at 62 helps to preserve your nest egg which can be passed down to the next generation.
I worked in the public sector for several years and I’m working in the private sector now. I’m going to get a pension at 62, but I’m going to continue working until I hit my FRA. I’m going to invest my entire pension when I start collecting it and keep investing it until I retire.
I retired at 55 (2 years ago) and been lucky enough to save and grow my 401k to over 2M during my working career. I do have money outside of my 401K but I’m using the Rule of 55 to access my 401K for living expenses and within the last 2 years, been living off the profits from the 401K without touching the principle. The biggest internal debate I have for myself is, should I take early SS so that I can use that extra money to go on more vacations when I’m younger and able to do more physical activities, and any extra can be reinvested, or spend down my 401K and postpone taking SSN until FRA to avoid higher RMD later down the line. I guess this is a good dilemma to have.
Classic case of a U-shaped retirement spending plan. You want more early to travel, then it’ll settle down after for a decade, and then it may increase due to long term care, etc. Simple enough to run some numbers with an advisor and then see whether collecting SS early makes sense. (I do a lot if spreadsheets myself, but I’d go to an expert for this because their spreadsheets are better and looking at all the tax consequences too.)
Roth IRA conversion is another possible strategy to reduce RMDs. Congratulation on being a good worker and saver! 57 here and dreaming about retirement 😀
Tshay..So hard to give a helpful opinion, without knowing other critical details, such as; do you have a spouse who may survive you, and if so; does he/she have their own retirement accounts? Do you have a mortgage or any other type of debt? Will you and/or your spouse (if there is one) be receiving any type of pension from a former employer? Are there any dependent children still in the picture? These issues could make ALL the difference, in determining whether or not you should wait for your maximum Social Security benefit, at age 70.
I took my Social Security at 62 and I have no regrets. I had three cousins who all died right at 62 years old who worked all their lives and got nothing. I'm 65 now and again I have no regrets taking it early.
I collected at 62, A year and a half later the ACA was starting. I suspended my SS until past 66. I am the second person in my family to have ever collected any SS. I have a modest but tax efficient portfolio, now only with 12% in tax infested money. If I had it to do over, I would have done more Roth conversions first and then waited longer for my SS. I am single, and not aware of any children. Just my story. Outcomes will be different for others.
@@penelope5500I suspect he had the SS File and Suspend options that were eliminated April 30, 2016. Obamacare ACA was offered I think beginning on 2011, which would never pass today even if the Dems controlled both Houses. Manchin and 2 other Dem Senators would probably not vote for ACA in today’s political climate. ACA was about 1,000 pages long because the Dems were not 1 thinking, and many compromises had to be made, resulting in a very, very complex program,
My uncle retired with no savings, just Social Security. At only $1,850 per month, he rents a nice 1 bedroom apt and has plenty leftover after bills. Of course, he retired in the Phillipines where his rent is only $350/month...including utilities!
My son will be 8 when I hit 62, so I'm definitely retiring then. That's partly because he will also get dependent social security benefit - 50 percent of my normal age retirement benefit at 67. You should cover this topic and social security benefit for dependents.
You are one of the few advisors that considers the time-value of money. For example, if I take $1893 at 65 and earn 7%, then it indefinitely remains ahead of taking $2,010 at 67 (FRT) or taking $2,774 at 70.
#6 Taxes. Social Security is taxed at a lower rate than say income withdrawn from your 401K or IRA which might have both state and federal income taxes due. Thus not only will your portfolio grow by not taking out money to live, it will grow by the additional amount not taken out to cover taxes. #7 You are single. You don't need to maximize your benefits for a spouse, and in most cases Social Security breaks even, it was designed to break even on average for early and late filers. #8 We spend less as we age and spend more in our earlier retirement go go years, despite the scare tactics that you will need every penny to pay for healthcare the statistics don't support that. While healthcare cost do rise with age, other expense drop more, resulting in less spending as you age. #9 You have had enough and can't stand any more. Taking Social Security may give you the opportunity to change jobs and do something you enjoy that pays less but is more fulfilling.
I'm not taking social security until 70 for one simple reason. I've been a moderate/high earner and should predecease my wife and I want the maximum benefit for the survivor, either way.
To me, that would be even more reason to start at 62. Given you’re a high wage earner, I’d imagine you’d have a sizable retirement account(s). Starting at 62 means you leave more of that untouched. So that if you happen to go early, your wife has more of the retirement accounts available to her. And she’d be much more in control of it than SS.
Waiting to 70 is fine. But you have to consider the “spousal” strategy of your wife drawing on her PIA, or drawing 50% of your FRA PIA. She can’t draw on your FRA PIA until you draw. So waiting to 70 can mean forfeiting her 50% spousal.
I’m currently 58 and just retired. Right now if I don’t pay another cent into SS I will receive $2,566 per month if I start at 62. If I wait until I am 67 the amount goes up to $3,858. That is a difference of $1,292 by waiting 5 years. I don’t need the money right now so I have calculated that if I save that money starting at 62 into a savings account I will accumulate roughly $154,000 over the 5 years between when I’m 62 to 67. If I were to invest that money I would need a return of 10% annually to match the difference in the payment amounts between starting at 62 and 67. By coincidence, this is roughly the average annual returns of the S&P over the last century. Since starting at 62 gets money into my and my family’s hands sooner rather than later in case something happens to me, the benefits of early withdrawal and then investing that money make good financial sense to me.
My brother is still working full time at age 66, and he hasn’t started to collect SS yet. He also has a pretty serious health issue. I can’t talk any sense into him regarding this topic. I’m praying that he retires soon, but I know that he’s on his own journey. 🙏
I started collecting at 63 and 4 months. Doing so has made my life less stressful. I still work. Each year, I continue to pay into social security. Therefore, I receive a yearly increase (in addition to cola) based on the amount paid in. I have no regrets on my decision to collect early.
James, great info as usual. But this one was tailored for married couples. Could you retitle it or add in for single people thinking about taking SS at 62? Thanks
At 62 you're also getting 60% less benefits if you waited to 70. When you die your spouse get's 60% less benefits the rest of their life if their SSA is less than your benefits. If you work and made money over the limit up to 67 you are penalized quite a bit. 70 is the old 55-60 in your father's time. 70 today, your breakeven age is lower than retirees that have a FRA of 67.
Good content! I think the big thing you might also want to weigh, if you can afford to, is whether you think you can earn the roughly 7% increase in SS you get each year by waiting…..
I initially considered collecting SS early so I can invest (option 2), but few issues came up: 1. I have significant amount of Roth conversion I need to do once I retire to minimize RMD. 2. While the market on average will outperform the delayed SS benefits, that's the average, not what'll happen each year.
I’m looking forward to retirement around 50/52 with a state retirement pension plus a 457 plan. I plan to draw SS as soon as possible because I don’t need the higher payout to make ends meet.
the kicker to your second point is when a substantial amount of the portfolio is in Roth, taking at 62 means that the Roth can keep growing tax free that much longer.
Great video! I'm taking mine early for reason #2. I was fortunate to be able to take early retirement at 58 with a pension, which I front loaded to be a higher amount until age 62. Now that I'm turning 62, I had a choice to either take my SS, which combined with my now reduced pension should be almost exactly what I was bringing home with my front-loaded pension, or start drawing on my 401k and investments. I chose to take the SS now, and let the investments continue to build. Yes its a bit of a crapshoot, but I chose to build the thing I have some control over. I have no control over SS other than when to take it, I get what the government says I get. My investments are mine, and I control them, so I chose to let that be the bigger piece of my retirement pie. I guess time will tell if I made the right choice.
James would you please do some more “scenario based” social security claiming videos. My specific case is one working spouse with high lifetime earning. Non working spouse with no ss credits. Show the difference if they claim early or full retirement or 70 to illustrate the effect of the spousal benefits on the total claim value. Thanks!
Great points, particularly #2. If you invest the money, you’re increasing your risk but will more than likely come out ahead. It therefore comes down to the amount of risk your situation can accommodate.
This is sound advice, thank you. I would add also to your point #2 about investing the SS money, the longer the time of investing, the more time of tax-free growth if one intends on bequesting your children inherited money at the "stepped up" basis. I will add another point to consider: Our US Federal government is constantly in a debate about trimming SS benefits. Grabbing the money now may well secure a "grandffathered" status that will be of profound benefit should Uncle Sam implement SS benefit cuts, most likely by way of means testing. "A bird in the hand is worth two in the bush". 🕊
You feel strongly that the threat of cuts to SS benefits should be considered, yet you feel secure that your benefit will be grandfathered. What makes you think that if SS benefits get cut that the current benefit of recipients would be off limits? Please explain.
all good points; I took mine at 62 and do not regret it - break even is at 78 so I would rather have now than later - no telling what happens in the future anyway
What about getting it early because what you will get at 62 will be enough to maintain a comfortable life and you want to enjoy life while your health allows you to do so. Based on my family history, I know that I won't live beyond my mid 80s and the last 10 years will be in poor health. Most of my family don't make it into their 80s. I don't have a single ancestor on either side of my family that has lived to 90 that I can find. I want to get it ASAP and enjoy the time i have left. Tomorrow is never guaranteed.
I say collect it early. Too many friends say they can’t wait to retire, then they die early. I’m going to a funeral this Mon. in which a high school friend said she couldn’t wait til she retired. She never married, was healthy , busy always taking care of her house inside and out, and was going to travel. She fell, someone found her soon. It’s not like she was there for a day. She ended up in Intensive care. They had to turn her life support off as she went into organ failure. I’m going to her funeral mass Monday. I still can’t believe she is gone.
Your video is very good/informative. I applied for SS at 62. My father lived to be 85 and my mother is still alive. She's 89 now. I recently applied for survivor benefits. I was married for 34 years. My ex died 10/18/2024; my SS benefits will double in Jan. 2025. My assets are in E-Trade.
Main reasons to collect at 62. 1. You earned it and an ACME safe could fall on you a day after your 62nd Bday. 2. At 62 you are still young enough to enjoy your SS earnings. 3. The way government seems to be interested in stopping SS, you should get it while the getting is good.
I plan to take mine at 62, which will be next yr. I agree with most of the comments about taking it early, I need the money now. Yes waiting would increase it. I would like to enjoy it now. I'm disabled, but was unable to receive my SSDI. I would like to have my own money again without having to depend on my husband or son. Live is not promised I want to live.(I don't have problems that can take my life) but you just don't know.
Im taking my social security benifits at 62 becaus I have no idea how long i will live do to how things are in my family history some die early and some live long into there 90s thats why I'm taking my money sooner rather then wait.
I'm gonna be 62 this Dec so I'm filing. I'm on medical medicaid so I got that covered because I'm not working at the present & even if I work part time with SS, my income will still be below the highest cut-off for eligibility.
I filed at 62, if I waited until 70, I would have left about $120,000.00 on the table. It would take 33 years to make up the difference if I filed at 70. I don't think I'll live to 95 AND DON'T WANT TO !!!
I don’t believe they have said how they will execute any reduction. If they do have to cut20% from total outlays from the SS Trust Fund, I doubt they would peanut butter spread it across all recipients. Do I think it’s too soon to tell.
You need to understand what the issue is with SS. If by 2033-34 no solution has been implemented and benefits are reduced, it will most likely be across the board since the money coming in from SS payroll tax will not cover the money going out. That is because SS will have burned through the excess SS funds that are currently invested in government bonds in order to pay for this gap in cash flow leading up to 2033-34. It will affect those currently receiving SS benefits at the time. I seriously doubt that Congress will allow this to happen. They may wait to the last minute to implement a solution, but they will do it. The longer they wait the more painful the solution will be.
We are 64/66. I guarantee there will be no cuts for my age group. For younger people perhaps, and certainly some increased taxes. Taking money from people already drawing SS would be political suicide. Remember we are the largest group ever to collect, and we all vote.
It depends upon how the reductions are implemented. You might take the 20-25% haircut against the LOWER benefit you locked in by collecting early, i.e. a reduction of an already reduced benefit. If that's the case, it makes no sense to take the SS benefit to beat out the SS trust fund depletion. I had the same question as you did but I think it makes no sense to make a lifetime decision based on speculation about something we have no control over.
Another reason to take your benefit early is if you are the spouse with a significantly lower earnings history. The downside is the lower spousal benefits (about 35% less) and the potential for SS benefits to be taxed if the higher-earning spouse is still working.
I did some "unscientific" calculations to compare taking it at age 62 and 67. I used the social security website to get the benefit amounts and assumed the same earnings in either case and also assumed I'd retire at age 62 and start taking social security immediately or wait 5 years. If I start taking it at age 62, I would come out ahead (relative to the benefits starting at age 67) up until age 78. Average life expectancy for a man in the US is 76.3 years, so seems like a no brainer to me to start collecting it at age 62. You also get more time to enjoy it.
Take the amount paid each month @62 X 12 months ~~ Multiply it by 18 years will give you the total paid out at 80. Do the same for @67 but multiply by 13 years instead. The differences only few percent for the entire life span. If you want to know the exact percentage differences - Take the differences between 2 numbers and divided to your total 18 years or 13 amount whichever you are calculating than multiply it by 100. I'm claiming mine @62
As of now, I'll be applying at exactly the first day of age 62. If you invest wisely, have zero debt, and house paid off, then I couldn't care less about an extra $240K or so. What use is it if I'm 6 feet under at 87 or so?
@@robertstevens2030it’s not “ federal welfare”. You have answered the same on numerous comments. It’s our money the govt. took from our hard earned paychecks when we were employed. It’s not a hand out or welfare, it’s our money. Why do you care if someone wants to take it out early? Their business, not yours. Bot.
You left out one of the best reasons! Take it early to enjoy the money with your family, while you are still young enough to get around during your go-go years!
Heck yeah! That’s what I’m gonna do. I’m not waiting till I’ll 70 before I enjoy life.
Amen. You never know how long you have left.
Why not enjoy a larger check with your family?
YES!!!! Why do all of these "experts" ignore that?
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My dear baby brother died at 59 & never got to collect social security even though he worked hard his entire life..I started collecting mine at 62. No regrets 💙
I did it @ age 62 n loving its benefits with my family n friends. I’m now 70 n enjoying my twilight years by the Grace of God
Tomorrow is not promised. If you can afford to, retire and do the things that make your heart sing. No point in being the richest in the cemetery.
I was forced into retirement by the CV-19 flu. My wife and I both lost our jobs. After two years I had had enough and got another full time job. I don't really need the money, though it is nice, but I need to do something besides leisure. I go to work singing. My dad retired at 66 and played golf for the next 20 years. That is a job I don't want.
Collecting at 62 is foolish.
Amen
True Dat 👍
@@uncareid5557, I will take the golfing for twenty years!
I retired at 62 and never regretted it.
I retired at the age of 61 back in Feb'24 with regrets and I'm not waiting until I'm 65 to collect Social Security, 4 months prior before I turn 62, I'm applying for , no if's but's about it.
Ditto.
1) I don't have any idea of my life expectancy.
2) I don't have a portfolio.
3) I'm single and 61.
4) I haven't any children.
5) I need it now.
My Daddy used to say, before he left this cold, cruel world, ''Sometimes you just gotta get what you can get while you can get it.''
File at 62?? Stupid idea. Why do you want a tiny check? What is the rush to the Federal welfare trough?
Same boat. What to do? Retirement is not an option with nothing and no one to help or depend on in any way.
Have you been watching Harley Davidson and the Marlboro Man again😉
Your father's advice is practical and resonates deeply. In your situation, focusing on immediate needs and exploring your options is crucial. How are you approaching your financial planning given these priorities and uncertainties?
@@jamesripton7120because you can work part time and make up the difference.
I took it early and never regretted it. What was nice was when I turned 65, I automatically received my medicare cards without having to apply.
You will regret your decision later. Opting for a small check was foolish
How do you know what someone else will regret when you don't know their situation? Shutup!!!
@@richardargst157…. You know nothing of their planning or resources. 🤐🤐
@@richardargst157 He or she could be a millionaire for all you know.
LMAO
My Mom died at age 49. Nuf said. I'm taking it early!!!!!
Genius thinking right there.
SMH
Had a friend at work that his Dad who was a twin died at 45. His twin brother is 85. You never know what hand you will be dealt.
Waiting longer to get more is a lure the government made. All that money taken at 62 has to be made up to break even which will take years.. Most people will be dead by that time.
No cemetery headstone ever said, I WISH I SPENT ANOTHER DAY AT WORK.
But there are a lot of tombstones that say "I was dead right".
Why would someone put something so stupid on their head stone. In fact NO ONE puts ANYTHING on their own headstone. That is such an illfated comment! Many people LOVE their work and will never "retire". Retirement is for quitters! If you hate your job, get one you love. Wasteing your life away working at a job you hate is a fools errond. Try coming up with something original!
@@tammyavanti4460You are free to work at a paid job until you die. But that approach is not for most people.
Not yet but my cousins will
Good thoughts. I’m 54 now and had a triple bypass a couple years ago. My mom died at 62 from a heart attack so I HIGHLY doubt I’ll live past 70. So that makes sense to me to collect at 62. If my wife pulls it at 62 also, we can completely not touch our portfolio except for crazy vacations.
The perfect example for taking SS at 62. Sorry for your health issues.
I applied for benefits at age 62 mainly because I just don't trust the crooks and monkeys who run the Congress to keep their hands out of it and not mess with eligibility requirements and/or other criteria (and which I'm sure is coming as the funding crisis gets worse with time) and didn't want the door slammed in my face when I needed the money. I decided to grab while the grabbing is good and don't regret it 1 bit. Also, despite what James said in this video (and his presentation here is actually pretty good), you still have NO IDEA as to exactly how long you're going to live because everyone's situation is different. I've known several individuals who had 'life expectancies' of 75 or more years, but died early due to unanticipated accidents or illness and received nothing. My true feelings are: You've paid into the fund, it's YOUR money, life is short, so eat your dessert first! And don't feel bad about doing it!
You made a very foolish decision that you will regret as each year passes and you realize you could have had a larger check.
@@jacksummer854….. The guy is working his plan which is his choice and his plan…. Good for him.
@jacksummer854 really?
Please explain
40 years of corporate America. I took mine at age 62. Then I cheated and filed for SSDI. It was a 3-year battle, but I won my SSDI. Getting FRB now. I have 1y left for my SSDI to turn back SSB. Downsize to Independent Senior Living. So I'm good.
Just bought a $12000 motorcycle with my SS. If I waited till 70 I would have been saying I could have, I could have.
I worked for 46 years and at age 62 I had enough savings on my portfolios and with SS and unions pensions I manage to paid all my bills and have some left over, and also I didn't wanted to push to full retirement age, I was a truck driver for over 38 years and the stress was getting to be a concern for my health now I feel good, better health relax and the good thing for anyone save before retirement just in case you need it. good luck all.
My uncle retired with no savings, just Social Security. At only $1,850 per month, he rents a nice 1 bedroom apt and has plenty leftover after bills. However, he retired in the Phillipines where his rent is only $350/month...including utilities!
I drove semi-tractor/trailer vehicles for a while but developed blood clots in my leg, had to quit. I know what you mean about the stress levels due to trucking. Can't *imagine* doing it for 38 years! Like I say to the military folks, thank you for your service, sir. Drivers are genuine public servants, even though they don't get the credit for it.
Congratulations on reaching a comfortable and well-deserved retirement! It’s great to hear that you’re enjoying better health and peace of mind. How do you plan to maintain your financial security and well-being as you continue enjoying your retirement?
Collecting smaller amount early versus collecting bigger amount later.
Every calculation will show that the total accumulated amount collected between the two will be even at age 75.33. After that age, a person who collected at 67 will get more.
The real question is, where will you be at age 75.5? If you pass away before the age of 75, than the person who collected at 62 beats you. And even If you’re still alive, the extra money that you will be collecting only means you will have extra money to buy more diapers in the nursing home. Or maybe, it will buy you extra massage from the nurse aide, since you will have extra money. But the years that you could have enjoyed early for leasure and travel while you can still walk and run, those years will be forever gone and you will not be able to collect those later.
Well said 😂.
I retired with a pension at 55 and no debt. I've always been active and want to enjoy my abilities while I still can. I'll be taking my SS at 62.
It almost seems like people think that taking it early, your money somehow vanishes into the ether. Take it early, spend some, save the rest/add to your portfolio. If you make it to 75 you'll still have that plus the earlier enjoyment with better mobility.
Or maybe you get hit by a bus at 67.
But they will have to make up all they gave up to break even.
@@340rps There is no way to make it up. The travel that they missed, the time that they could have spent with their families, the fun that they could have enjoyed during those years, the invitations that they declined because they have work, those are passed. Once they are gone, they cannot get them back, unless they have time machine.
I plan to start taking my SS at 62 mainly for your reason #2. Every dollar I get from social security is a dollar I don't need to take from my 401K so it can keep growing. Also I plan to leave a bulk of the money I have in my 401K to my son. When I pass away my son can't benefit from my SS but he gets to have what is in my 401K. I know I need to consider my wife but she has her own income stream to keep her viable.
I ll take it 62. Life is short and unpredictable. I don’t care a big money that I have to wait another 3-8 years. I d rather enjoy it as soon as I can.
I took SS at 62. A couple of months later, I maxed out all my credit cards as well. Sold my house and am now renting. I plan to spend it all in the next 4 years. Tomorrow is not guaranteed. Life is short and unpredictable. Enjoy it all now.
@@JohnBowl14690
are you 5?
This is an important point. People are focused on how many years you have left, but not how many active years you have left. If at 62 you only have 5 active years left, do you want to waste them working or do you want to be out kayaking, hiking, and playing with the grandkids (or whatever your active lifestyle hobbies are)?
Sorry there is no big money. I worked 50 years and get 1700 a month
Very simple we never know when our time is up. I took early retirement at 62 because my 2 brothers never made it to 68 years old.
I just moved to America. I'm 67. Am I eligible to collect a Federal welfare check?
@@juangarcia8828…. You will not be getting social security as you’re not qualified.
I collected at 62 and NEVER LOOKED BACK!!! I was working part time, home, and car paid for, no debt... I was used to living off my part time paycheck.. why let the government invest money I've paid in 40 years?? Nope, i drew early.. best decision ever.. for me..
How much is the benefit
Something I never see in these early vs late analyses is the cost of medical insurance being factored into the question. If you wait until you can collect full retirement you qualify for Medicare, but if you take retirement early, then You have to pay for you medical insurance out of your own pocket which decreases how much money you have available to spend on your other expenses.
I am currently 55 years old. My SS at age 62 is about $2,100 a month. At age 67 is about $3,100. I will collect at age 62.
Do you live now on $2,100/month? Collecting early might be okay but think about supplemental income via part-time.
So sure you get more a month at 67 but if you wait you miss out of $2k a month for 5 yrs that’s $120k. It’ll take you 3 yrs just to get to that $120k if you wait until 67, just take it early.
Your giving the Government $1000 per month of "your" money by doing that. Stupid. And you must have a good amount in savings. Because you sure aint' going to be able to survive on $2100 a month.
And and it will cost you out of pocket for the 3 years your own health care cost that can run hundreds of dollars a month . Can you afford that? Plus the hit you take on your month check and every year SS takes more and more for Medicare when you hit 65. Plus your additional supplement G plan. Hope you saved up enough.
guess you worked more, mine is 900
I waited until I was 70…. I really enjoyed my job (registered nurse). I am in good health…..no issues and still very active. Did a lot of traveling (still do) fun trips and cruises……paid my house and car off……all my credit cards leaving only one to use….just utility bills to pay. Lots of traveling planned for the future…..and my SS right now is 3 times what it would be if I had retired at 62. Taking it at 70 was a positive thing for me all the way around. I also did major repairs to my house…..new roof and new heating /cooling system before retiring…..all paid for with no need to take credit for these…..paid in cash.
I'm taking mine at 62. I'm not waiting. I'm not going to lose out on my money
I took mine at 62. Best decision i ever made.😊😊😊😊😊❤
how do you know that you wont be sorry later
I'll take it at 70. I won't need the money before then and I'd rather have the max amount of SS benefits for the rest of my life as I expect to live a long time. I see it as a form of "insurance" that I won't run out of money before I die. Both of my parents are in their 90's and I am in my late 50's, in excellent health, and in great shape.
Your not even promised tomorrow. My papaw liked 1 month to retire at 70 he passed away at 69 and 11 months. You will regret it if the same thing happens to you.
i refuse to take it early if my husband is making good money…why give all that back to the govt thru taxable income?
@@marty64thorntonI doubt he will regret taking social security at 70 once he’s dead.
And it will take you untill 80 to make up what you would have if you took it at 62. The governments trick to get you to wait.
I was perfectly healthy at 50. Then diagnosed with aggressive cancer with zero family history. Good luck with that crystal ball!
#6 - Enjoy what remains of your life while you are in better health.
Even if you are very healthy, you will be more-able to do things you enjoy at age 62 than 70 and have longer memories of those things. Dont just focus on the monthly $.
I was fed-up, burned-out, and frustrated with work, so I planned 15+ years ahead to retire at 62, and I have zero regrets.
Biggest kicker is health insurance. I am 66 and my wife is 3 years younger with Krones disease. We are debt free with a pension. BUT without my job's health insurance, we would be toast!
My husband took his at age 63 and I just turned 62 in May, will receive my first pay this month, no regrets! They've had our money for 50 years, we both began paying in at age 15, we will gladly take our reduced monthly amount now.
Kinda bummed I’m just seeing the magic #62 since I’ll be 64 next month😂 Dang it!!
Happy Retirement to everyone!!!!
Enjoying your Golden Years is spot on.
I did the math. I break even at age 76, my life expectancy is that. Took at 62.
and?
Did the same my break even is 76 plus 2.months My wife is 61 and will get my benefit when I pass she will go from a $1300 benefit to a $4200 benefit for the rest of her life.
There is really no break even age. Unless you are strictly talking about total collected money.
There is no way to make it up. The travel that they missed, the time that they could have spent with their families or with each ofher, the fun that they could have enjoyed during those years, the invitations that they declined because they have work, those are passed. Once they are gone, they cannot get them back, unless they have time machine.
I knew a guy at my work he did all the math to the penny he waited till 65 he retired and less than a week later he passed away just go when you can
Thanks for another informative video. I’m really impressed with the clarity and straightforward discussion about retirement topics on your channel.
Another advantage to pulling the trigger early on SS is it allows the portfolio to have more of a legacy transfer to heirs by taking pressure off earlier withdrawals from the portfolio and it allows your financial advisor to make a few extra bucks off the larger portfolio balance..
The Federal government will pay you 8% per year plus inflation until you are 70. Do not collect early
To heck with the heirs, I need mine at 62, bcs there isn't any portfolio 😂. Military retirement & SS that's it.
@@sleuer66
THIS
screw legacy heirs, thats the sucker mentaility.
And you will pay more in taxes because of that strategy. There is no better way to pay less in taxes than to delay SS and drive down your retirement balance. The last thing you want is to take SS early with a 2 million dollar balance in your IRA and leave that to your heirs. They will lose half of that. Think about that.
I have several reasons to collect at age 62. First, my wife left me, second, all three children are over the age of 18, Three, the house must be sold, and the last reason is that my job is getting worst, asking me to do more every day. My actually most important reason is that I've seen a lot of people die at say 66 and didn't collect a dime of Social Security. I'm now 81 Y/O.
According to the SSA, the average SS check at 67 is $1,883. Why is it so small? Because fools collected at 62, not their FRA or 70.
5 years from 62 and ill be collecting then! Toby Keith died at 62!!! We dont know how long we have!!
That's exactly the reason I plan to wait... because I don't know how long I have!
Gene Hackman, June Lockhart, Jimmy Carter, Dick Van Dyke, Clint Eastwoord, etc., are all still alive!
If I die early, I won't regret not taking it... because I'll be dead. And yet if I live to be near 90 or more, I would most likely regret not taking it every single day, for those last ten years of my life.
@@MrEdwardCollins….. Age 62 works for me as it will allow my nest egg to grow which can be passed down to the next generation…. I have ran Monte Carlo simulations for years now and this method is what works for us.…. That is the true beauty of the system is that everyone can adjust it to their own retirement needs.
so????
@@MrEdwardCollinsYou forgot to name the many, many who died BEFORE age 62. Too many to list here.
@@MrEdwardCollinswow you know 5 extremely already wealthy people who lived past 90. Now base your entire life plan on that 👌
Tomorrow isn't promised and for that reason I decided to retire at the ripe old age of 57.
Thankfully my wife and I both have State Pensions, she retired at the age of 55.
I am 2 weeks into my retirement and will wait until the end of the month before I make any major decisions such as trips, vacations, downsizing of our home, etc...
My wife and I will draw my SS as soon as I am able to.
Remember this, we can always make money but we cannot buy time.
Congrats. I retired at 52 and not a moment too soon. I say retire as soon as you can as your time alive is the most precious thing you have as it is indeed limited. You want to make that time as enjoyable as possible. You can "buy" some time though by living as healthy of a lifestyle as you can.
If you have government pensions you likely wont get much SS as you probably didn't pay into it while working for the "state". OR did you have 40 credits with private business? Even if you do the SS admins will cut some of your SS.
Great video James. Very informative and well presented. I totally agree with all you said. One rarely sees this type of advice online.... I really agree w/ #2 - investing your monies at 62. Once one passes on - SS stops (unless spousal) but you can build a great nest egg to pass along to your heirs or favorite cause - this is what I have done for the past 5 years. Be well.
I'm taking mine at 62. I have a company pension, seven figure 401K and my SS should be in the $2300 a month range. 40 years working in the refinery is enough. I've done my time. It's time to relax on my 40 acres and build my dream cabin there.
I dont know when my grandfather or father started collecting social security, but they both passed away at 71. If they waited until age 70 for a higher payout, they only collected benefits for a couple months after a lifetime of work.
#2 seems to be the key. Not taking SS early puts additional stress on your portfolio early in retirement, and there's still 20 years before the SS break even.
Take SS at 70. Taking a small check is foolish.
How will you collect at 70 when you’re dead at 69?
@@jacksummer854… Everyone will have a different situation in my case after running multiple Monte Carlo simulations over the years I am confident in taking social security at age 62.
What are you living on in the meantime? Drawing down on your portfolio?
@@Me-fm9zk - That makes sense. Nobody lives past 70. Maybe 1 out of 1000.
I applied for survivor benefits at 65. My ex passed away at age 67. He collected SS benefits for 4 years. He retired at age 63 -- due to health decline issues. I have NO DEBT. Own my home. Own my 2024 vehicle (paid it off in 6 months). It's nice to NOT worry about finances especially at my age. ❤
I’m collecting ASAP. I’ve paid into it all my working life, & tomorrow isn’t guaranteed.
What is the rush to get to the Federal welfare trough? You will collect much more SS if you wait until you are 70
@@robertstevens2030because waiting 8 more years isn't guaranteed that you'll even live that long and then you worked your whole life and collected nothing
If I could collect SS now at age 48 I would. I could live good on $1,000/month in a lot of other countries. Been working for 30 yrs.
So many people forget the survivor benefit. Thanks for including this. Well done.
5 Really Good Reasons to File for Social Security at Age 62
1: Your health is declining.
2: You no longer have to go to work.
3: You no longer have to listen to a Bat Ship Boss.
4: You can treat every day as a vacation day.
5: Read 1-4
I did it at 63 never have regretted it
Im done at 62. Enjoy life before you are too old, you only have 1 go at it.
According to the SSA, the average SS check at 67 is $1,883. Why is it so small? Because fools collected at 62, not their FRA or 70.
Bravo, that is exactly how I explained to others. Besides, waiting to 67 or 70, it is 5 years delay and have to take time to make up the those who received in 62 collecting it. The number does not add up till at least 10+ years before it is ahead of the 62. Thanks for spending time to explain to those who trusted, but not doing the calculation nor thinking correctly.
One problem is Cobra. The medical insurance unless you have a private that won't drain your
Savings.
TAKE THE MONEY AND RUN!!! I AM 64 AND LOVE GETTING MY MONTHLY STIPEND. WOULD NOT GET MUCH MORE IF I WAITED.
What is the rush to get to the Federal welfare trough? You will collect much more SS if you wait until you are 70
According to the SSA, the average SS check at 67 is $1,883. Why is it so small? Because fools collected at 62, not their FRA or 70.
@@robertstevens2030…. If you have planned properly taking social security at 62 helps to preserve your nest egg which can be passed down to the next generation.
@@robertstevens2030you are assuming you will make it to 70. Quality of life at 64 vs 70. Take it and run.
@@robertstevens2030
Its called being a sucker.
I worked in the public sector for several years and I’m working in the private sector now. I’m going to get a pension at 62, but I’m going to continue working until I hit my FRA. I’m going to invest my entire pension when I start collecting it and keep investing it until I retire.
I'm turning 62 and planning on retiring. I plan to still work part time and invest my retirement money. It's a win, win!
I retired at 55 (2 years ago) and been lucky enough to save and grow my 401k to over 2M during my working career. I do have money outside of my 401K but I’m using the Rule of 55 to access my 401K for living expenses and within the last 2 years, been living off the profits from the 401K without touching the principle. The biggest internal debate I have for myself is, should I take early SS so that I can use that extra money to go on more vacations when I’m younger and able to do more physical activities, and any extra can be reinvested, or spend down my 401K and postpone taking SSN until FRA to avoid higher RMD later down the line. I guess this is a good dilemma to have.
Classic case of a U-shaped retirement spending plan. You want more early to travel, then it’ll settle down after for a decade, and then it may increase due to long term care, etc.
Simple enough to run some numbers with an advisor and then see whether collecting SS early makes sense.
(I do a lot if spreadsheets myself, but I’d go to an expert for this because their spreadsheets are better and looking at all the tax consequences too.)
Roth IRA conversion is another possible strategy to reduce RMDs. Congratulation on being a good worker and saver! 57 here and dreaming about retirement 😀
I’m considering retiring at 55. With the rule of 55 is there a penalty to withdraw from your 401k early?
You need to look at your and your family health history.
Tshay..So hard to give a helpful opinion, without knowing other critical details, such as; do you have a spouse who may survive you, and if so; does he/she have their own retirement accounts? Do you have a mortgage or any other type of debt? Will you and/or your spouse (if there is one) be receiving any type of pension from a former employer? Are there any dependent children still in the picture? These issues could make ALL the difference, in determining whether or not you should wait for your maximum Social Security benefit, at age 70.
I took my Social Security at 62 and I have no regrets. I had three cousins who all died right at 62 years old who worked all their lives and got nothing. I'm 65 now and again I have no regrets taking it early.
In order for me to start collecting at 62 i first need to get a tent and a sleeping bag
lol! Good one
Facts
Savings is the most important bill.
😂
Thanks for this. I’ll be 57 in September and I’ve been grappling with this. You’ve given great reasons to go ahead and take my SS in 5 years.
I collected at 62, A year and a half later the ACA was starting. I suspended my SS until past 66. I am the second person in my family to have ever collected any SS. I have a modest but tax efficient portfolio, now only with 12% in tax infested money.
If I had it to do over, I would have done more Roth conversions first and then waited longer for my SS.
I am single, and not aware of any children.
Just my story. Outcomes will be different for others.
Interesting. I thought there was a 12 mo. limit on being able to suspend one's SS.
@@penelope5500I suspect he had the SS File and Suspend options that were eliminated April 30, 2016. Obamacare ACA was offered I think beginning on 2011, which would never pass today even if the Dems controlled both Houses. Manchin and 2 other Dem Senators would probably not vote for ACA in today’s political climate. ACA was about 1,000 pages long because the Dems were not 1 thinking, and many compromises had to be made, resulting in a very, very complex program,
My uncle retired with no savings, just Social Security. At only $1,850 per month, he rents a nice 1 bedroom apt and has plenty leftover after bills. Of course, he retired in the Phillipines where his rent is only $350/month...including utilities!
Well,those who can live on S.S. at 62 must have very few expenses or a second source of income.
My son will be 8 when I hit 62, so I'm definitely retiring then. That's partly because he will also get dependent social security benefit - 50 percent of my normal age retirement benefit at 67. You should cover this topic and social security benefit for dependents.
You can thank the Liberals for getting that benefit for the poor, old people with young children.
You are one of the few advisors that considers the time-value of money.
For example, if I take $1893 at 65 and earn 7%, then it indefinitely remains
ahead of taking $2,010 at 67 (FRT) or taking $2,774 at 70.
#6 Taxes. Social Security is taxed at a lower rate than say income withdrawn from your 401K or IRA which might have both state and federal income taxes due. Thus not only will your portfolio grow by not taking out money to live, it will grow by the additional amount not taken out to cover taxes. #7 You are single. You don't need to maximize your benefits for a spouse, and in most cases Social Security breaks even, it was designed to break even on average for early and late filers. #8 We spend less as we age and spend more in our earlier retirement go go years, despite the scare tactics that you will need every penny to pay for healthcare the statistics don't support that. While healthcare cost do rise with age, other expense drop more, resulting in less spending as you age. #9 You have had enough and can't stand any more. Taking Social Security may give you the opportunity to change jobs and do something you enjoy that pays less but is more fulfilling.
@jamesalias595 ….. All great points #6 thru #9 well stated and informative.👍👍
Social security is not taxed
I'm not taking social security until 70 for one simple reason. I've been a moderate/high earner and should predecease my wife and I want the maximum benefit for the survivor, either way.
Hopefully you live until 70!
To me, that would be even more reason to start at 62. Given you’re a high wage earner, I’d imagine you’d have a sizable retirement account(s). Starting at 62 means you leave more of that untouched. So that if you happen to go early, your wife has more of the retirement accounts available to her. And she’d be much more in control of it than SS.
Waiting to 70 is fine. But you have to consider the “spousal” strategy of your wife drawing on her PIA, or drawing 50% of your FRA PIA. She can’t draw on your FRA PIA until you draw. So waiting to 70 can mean forfeiting her 50% spousal.
You are absolutely right I did the same thing. As long as your healthy keep working. Taking it early you take a big hit in the amount you get.
100% agreed
I’m currently 58 and just retired. Right now if I don’t pay another cent into SS I will receive $2,566 per month if I start at 62. If I wait until I am 67 the amount goes up to $3,858. That is a difference of $1,292 by waiting 5 years.
I don’t need the money right now so I have calculated that if I save that money starting at 62 into a savings account I will accumulate roughly $154,000 over the 5 years between when I’m 62 to 67.
If I were to invest that money I would need a return of 10% annually to match the difference in the payment amounts between starting at 62 and 67. By coincidence, this is roughly the average annual returns of the S&P over the last century.
Since starting at 62 gets money into my and my family’s hands sooner rather than later in case something happens to me, the benefits of early withdrawal and then investing that money make good financial sense to me.
My brother is still working full time at age 66, and he hasn’t started to collect SS yet. He also has a pretty serious health issue. I can’t talk any sense into him regarding this topic. I’m praying that he retires soon, but I know that he’s on his own journey. 🙏
File at 62?? Stupid idea. Why do you want a tiny check? What is the rush to the Federal welfare trough?
Another very informative video James! Thanks!
I started collecting at 63 and 4 months. Doing so has made my life less stressful. I still work. Each year, I continue to pay into social security. Therefore, I receive a yearly increase (in addition to cola) based on the amount paid in. I have no regrets on my decision to collect early.
James, great info as usual. But this one was tailored for married couples. Could you retitle it or add in for single people thinking about taking SS at 62? Thanks
Also divorced, they ended spousal benefits, totally sucks.
@@jackiesicilian5720
Get a job
At 62 you're also getting 60% less benefits if you waited to 70.
When you die your spouse get's 60% less benefits the rest of their life if their SSA is less than your benefits.
If you work and made money over the limit up to 67 you are penalized quite a bit.
70 is the old 55-60 in your father's time.
70 today, your breakeven age is lower than retirees that have a FRA of 67.
Good content! I think the big thing you might also want to weigh, if you can afford to, is whether you think you can earn the roughly 7% increase in SS you get each year by waiting…..
I initially considered collecting SS early so I can invest (option 2), but few issues came up:
1. I have significant amount of Roth conversion I need to do once I retire to minimize RMD.
2. While the market on average will outperform the delayed SS benefits, that's the average, not what'll happen each year.
I’m looking forward to retirement around 50/52 with a state retirement pension plus a 457 plan. I plan to draw SS as soon as possible because I don’t need the higher payout to make ends meet.
the kicker to your second point is when a substantial amount of the portfolio is in Roth, taking at 62 means that the Roth can keep growing tax free that much longer.
Plus SS is taxed advantaged compared to IRA/401k withdrawals
Yes, but depending on your income it isn’t a huge difference. For joint filers, it is 85% taxable when you go over $44k on the worksheet.
@@shawnbrennan7526… True, but we will take that 15% tax break vs none on a pension or retirement account.
Great video! I'm taking mine early for reason #2. I was fortunate to be able to take early retirement at 58 with a pension, which I front loaded to be a higher amount until age 62. Now that I'm turning 62, I had a choice to either take my SS, which combined with my now reduced pension should be almost exactly what I was bringing home with my front-loaded pension, or start drawing on my 401k and investments. I chose to take the SS now, and let the investments continue to build. Yes its a bit of a crapshoot, but I chose to build the thing I have some control over. I have no control over SS other than when to take it, I get what the government says I get. My investments are mine, and I control them, so I chose to let that be the bigger piece of my retirement pie. I guess time will tell if I made the right choice.
A simple excel spread sheet makes it clear. Unless you plan or have to work, or didn't pay in for any serious time, take SS at 62.
James would you please do some more “scenario based” social security claiming videos. My specific case is one working spouse with high lifetime earning. Non working spouse with no ss credits. Show the difference if they claim early or full retirement or 70 to illustrate the effect of the spousal benefits on the total claim value. Thanks!
Great points, particularly #2. If you invest the money, you’re increasing your risk but will more than likely come out ahead. It therefore comes down to the amount of risk your situation can accommodate.
This is sound advice, thank you. I would add also to your point #2 about investing the SS money, the longer the time of investing, the more time of tax-free growth if one intends on bequesting your children inherited money at the "stepped up" basis. I will add another point to consider: Our US Federal government is constantly in a debate about trimming SS benefits. Grabbing the money now may well secure a "grandffathered" status that will be of profound benefit should Uncle Sam implement SS benefit cuts, most likely by way of means testing. "A bird in the hand is worth two in the bush". 🕊
You feel strongly that the threat of cuts to SS benefits should be considered, yet you feel secure that your benefit will be grandfathered. What makes you think that if SS benefits get cut that the current benefit of recipients would be off limits? Please explain.
all good points; I took mine at 62 and do not regret it - break even is at 78 so I would rather have now than later - no telling what happens in the future anyway
then how do you know you wont need more in the future
What about getting it early because what you will get at 62 will be enough to maintain a comfortable life and you want to enjoy life while your health allows you to do so. Based on my family history, I know that I won't live beyond my mid 80s and the last 10 years will be in poor health. Most of my family don't make it into their 80s. I don't have a single ancestor on either side of my family that has lived to 90 that I can find. I want to get it ASAP and enjoy the time i have left. Tomorrow is never guaranteed.
I say collect it early. Too many friends say they can’t wait to retire, then they die early. I’m going to a funeral this Mon. in which a high school friend said she couldn’t wait til she retired. She never married, was healthy , busy always taking care of her house inside and out, and was going to travel. She fell, someone found her soon. It’s not like she was there for a day. She ended up in Intensive care. They had to turn her life support off as she went into organ failure. I’m going to her funeral mass Monday. I still can’t believe she is gone.
My older brother waited till 65 he passed 8 mounths later.
I'm retiring at 62
Your video is very good/informative. I applied for SS at 62. My father lived to be 85 and my mother is still alive. She's 89 now. I recently applied for survivor benefits. I was married for 34 years. My ex died 10/18/2024; my SS benefits will double in Jan. 2025. My assets are in E-Trade.
Main reasons to collect at 62. 1. You earned it and an ACME safe could fall on you a day after your 62nd Bday. 2. At 62 you are still young enough to enjoy your SS earnings. 3. The way government seems to be interested in stopping SS, you should get it while the getting is good.
You did not earn SS. SS is Federal welfare
Yes, with a 34 trillion-dollar deficit the ponzi scheme is over, and they are now adding a trillion dollars to this every 60 days.
💯 agree
26.5 year age gap between me and my husband! Thank you for that scenario! Very helpful!
Collect early and work just up to the maximum allowable without reducing benefits
Collect early? Are you nuts. Your check will always be small
@@jacksummer854….. If you take social security @62 you’re not drawing down your nest egg which can be passed to the next generation.
Retired at 53, collected at 62! Im 67 now. I have twice as much money than I retired with. Listen to the experts, one size fits all.
100 percent right my man!
I plan to take mine at 62, which will be next yr. I agree with most of the comments about taking it early, I need the money now. Yes waiting would increase it. I would like to enjoy it now. I'm disabled, but was unable to receive my SSDI. I would like to have my own money again without having to depend on my husband or son. Live is not promised I want to live.(I don't have problems that can take my life) but you just don't know.
Great Video James.
Your second point is extremely important and valid. Thank you.
Im taking my social security benifits at 62 becaus I have no idea how long i will live do to how things are in my family history some die early and some live long into there 90s thats why I'm taking my money sooner rather then wait.
Collecting at 62 means you will have a small check for the rest of your life.
@@jacksummer854… If you planned properly taking social security at 62 helps preserve your next egg. Which can be passed down to the next generations.
I'm gonna be 62 this Dec so I'm filing. I'm on medical medicaid so I got that covered because I'm not working at the present & even if I work part time with SS, my income will still be below the highest cut-off for eligibility.
I filed at 62, if I waited until 70, I would have left about $120,000.00 on the table. It would take 33 years to make up the difference if I filed at 70. I don't think I'll live to 95 AND DON'T WANT TO !!!
Thank you for this valuable information.
What about the chance that if nothing is done by 2033-34 and benefits are reduced by 20-25% would it be wiser to take out early?
I don’t believe they have said how they will execute any reduction. If they do have to cut20% from total outlays from the SS Trust Fund, I doubt they would peanut butter spread it across all recipients.
Do I think it’s too soon to tell.
You need to understand what the issue is with SS. If by 2033-34 no solution has been implemented and benefits are reduced, it will most likely be across the board since the money coming in from SS payroll tax will not cover the money going out. That is because SS will have burned through the excess SS funds that are currently invested in government bonds in order to pay for this gap in cash flow leading up to 2033-34. It will affect those currently receiving SS benefits at the time. I seriously doubt that Congress will allow this to happen. They may wait to the last minute to implement a solution, but they will do it. The longer they wait the more painful the solution will be.
Or later because you’ve made up for the reduction and are back to even.
We are 64/66. I guarantee there will be no cuts for my age group. For younger people perhaps, and certainly some increased taxes. Taking money from people already drawing SS would be political suicide. Remember we are the largest group ever to collect, and we all vote.
It depends upon how the reductions are implemented. You might take the 20-25% haircut against the LOWER benefit you locked in by collecting early, i.e. a reduction of an already reduced benefit. If that's the case, it makes no sense to take the SS benefit to beat out the SS trust fund depletion. I had the same question as you did but I think it makes no sense to make a lifetime decision based on speculation about something we have no control over.
Another reason to take your benefit early is if you are the spouse with a significantly lower earnings history. The downside is the lower spousal benefits (about 35% less) and the potential for SS benefits to be taxed if the higher-earning spouse is still working.
Your examples are of people who make a lot of money 💰
I did some "unscientific" calculations to compare taking it at age 62 and 67. I used the social security website to get the benefit amounts and assumed the same earnings in either case and also assumed I'd retire at age 62 and start taking social security immediately or wait 5 years. If I start taking it at age 62, I would come out ahead (relative to the benefits starting at age 67) up until age 78. Average life expectancy for a man in the US is 76.3 years, so seems like a no brainer to me to start collecting it at age 62. You also get more time to enjoy it.
File at 62?? Stupid idea. Why do you want a tiny check? What is the rush to the Federal welfare trough?
We want to travel while we can! And we are expecting to sit around when we get into our 80s.
Take the amount paid each month @62 X 12 months ~~ Multiply it by 18 years will give you the total paid out at 80. Do the same for @67 but multiply by 13 years instead. The differences only few percent for the entire life span. If you want to know the exact percentage differences - Take the differences between 2 numbers and divided to your total 18 years or 13 amount whichever you are calculating than multiply it by 100. I'm claiming mine @62
Wow 60K difference, I'm with you!
As of now, I'll be applying at exactly the first day of age 62. If you invest wisely, have zero debt, and house paid off, then I couldn't care less about an extra $240K or so. What use is it if I'm 6 feet under at 87 or so?
What is the rush to get to the Federal welfare trough? You will collect much more SS if you wait until you are 70
@@robertstevens2030it’s not “ federal welfare”. You have answered the same on numerous comments. It’s our money the govt. took from our hard earned paychecks when we were employed. It’s not a hand out or welfare, it’s our money. Why do you care if someone wants to take it out early? Their business, not yours. Bot.
@@robertstevens2030… It is not welfare in my case I have into social security for over 40 years.
You can apply three months before you turn 62.