Is it a good idea to collect social security at 62, continue to work & contribute that amount from before tax payroll to a 401(k)
Answers | 9
Doesn't make sense to do that at this point. The penalty you'd pay is greater than the return you'd receive. If you start collecting social security at 62 yrs old, your benefit is reduced by 25%. So if your full retirement age is 66 yrs old, and you would receive $1,000. If you start collecting at 62 yrs of age, you'll receive only $750.
You'd have to find an investment opportunity that yields a 25% return just to break even and you won't! If you do- run! If you wait 8 years, you can get a total increase of 32% or $1,320.
Ebong Eka, CPA and author of Start Me Up, is one of our Top 30 Most Influential People in Personal Finance and Wealth
65 yrs old 100% Social Security
72 yrs old 130% Social Security
If you wait until 72 and live up to 85, there is a $500,000 difference