Don’t Mess Up Your Social Security! StrandLife Wealth

Are you chomping at the bit, waiting to get to 62 so you can claim Social Security? Are you dreaming of all the things you’ll do with that “free money”?

Well, it might be time for a reality check: Claiming at 62 might be a bad idea.

The basic rule of Social Security is that the longer you wait to claim, the more money you’ll get.[1] There are a lot of intricacies to Social Security and the timing of your claim, but they all boil down to pretty much that concept: the longer you wait, the more money you’ll get.

Now, everyone’s situation is different, and it’s entirely possible that claiming at 62 is the right move for you, especially if you need the money, have a particular spousal situation, have a lower life expectancy, or something else. However, there are some strong reasons you may want to hold off.

You have what is called a “full retirement age.” This is the age when you receive the full value of your Social Security. Your full retirement age is determined by when you were born, but it is a few years after 62. Claiming at 62 means that you only receive 70% of the benefit you would receive at your full retirement age. So if your full retirement age is 65 and you can get $1000 a month for claiming at 65, if you claim at 62, you’ll only get $700 a month.[1]

If you claim at 62, then the value of your checks at the time you’re 62 is locked in for the rest of your life. The value of the checks will go up with what is called “Cost of Living Adjustments,” but you’ll lose out on the benefit of getting that extra money from your full retirement age value.[1]

This is why it’s crucial to understand what your full retirement age is. This calculator can help you determine what your full retirement age is and how much your benefits will be reduced if you claim early.

Make sure that you don’t claim at the wrong time! If you aren’t sure when to claim your Social Security, consider reaching out to one of our advisors today for a complimentary review of your financial situation. Deciding when to claim Social Security can be extremely complicated. It’s not easy to look through the SSA’s website and understand, just from those numbers, what you should do. It requires a complete understanding of your financial situation and how Social Security fits into that picture.