Is it better to start Social Security at age 62 or to wait until I am 65?
Answers | 4
The simple answer is to wait at least until you reach Full Retirement Age (FRA) which may be 65 for you. The FRA varies somewhat depending on the year of your birth. You can visit the Social Security website to get specifics as well as to request a benefits estimate (www.ssa.gov). Taking benefits at 62 permanently reduces your benefits by 25% for the rest of your life compared to benefits starting at your FRA. Unless you really need the money at 62, you probably don't want to take a permanent 25% reduction in your benefits. Another aspect is the earnings tax - if you collect benefits while you continue to work, they will take back some of the benefits depending on how much income you earn (this does not apply once you reach your FRA (after you've reached your FRA you can work as much as you want without any take backs). That could be a double-whammy - reduced benefits for life as well as a reduction for working. Yikes! The best advice is to start your retirement benefits as late as possible but not past age 70. Benefits increase by about 8% per year for every year you wait - up to age 70. You won't get 8% a year from any other investment. In fact, it pays to spend other funds for living expenses and hold off on your Social Security for as long as possible because of this increase. Good luck!
65 your earning 100%
72 your earning 130%
Depends on if you really need it.