If you're an American worker who qualifies for Social Security, your birth year will determine what the program considers your "full retirement age" (FRA) -- the point at which you can apply for retirement benefits and start collecting monthly checks at the full level you've earned based on your lifetime of payroll tax contributions.
If you aren't already collecting Social Security, your FRA will be between 66 and 67. But you're not obligated to follow the government's retirement age guideline. You can apply to start collecting your benefits as early as 62, or as late as 70. The downside of doing so early: smaller monthly checks. The upside of delaying: larger ones.
So when should you apply for Social Security? Well, the age at which the most people start collecting is 62, and despite those reduced benefit checks, it's still a smart move for many people. Here are three reasons why you might want to apply at 62 yourself.
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Reason No. 1: It might not be worth it to delay
The table below shows approximately how much slimmer or fatter your monthly retirement checks will be compared to your full benefits, depending on when you start collecting them.
Source: Social Security Administration.
Those figures might have you thinking it's a no-brainer that you should delay as long as possible, but that's not necessarily true. Delaying may give you bigger checks -- but you'll get fewer of them.
As the Social Security Administration has explained: "If you live to the average life expectancy for someone your age, you will receive about the same amount in lifetime benefits no matter whether you choose to start receiving benefits at age 62, full retirement age, age 70 or any age in between."
It can be reasonable to delay in some scenarios, such as if you can afford to wait, and if your health and family history give you reason to believe you stand a good chance of living longer than average. Also, if your spouse's retirement benefits are going to be far smaller than yours, you might aim to make your checks as big as possible, so that he or she can collect your more robust benefits if you pass away first.
But for many people, delaying isn't really worth it.
Reason No. 2: You just can't wait
Another excellent reason to start collecting your benefits at 62 is because you simply need the money. Your retirement may begin earlier than you had planned. According to the 2018 Transamerica Retirement Survey of Retirees, fully 56% of respondents said they had retired sooner than they'd been expecting to, with 24% of them citing a job loss as the reason, and 47% pointing to health- or family-related causes.
Without a steady paycheck, postponing your Social Security will mean living primarily off of your own savings, investments, pensions, and any other passive income sources you may have. But millions of Americans have not saved enough, as the following survey results from 2018 reflect:
Source: 2018 Retirement Confidence Survey.
Even if you're among the better-prepared seniors, spending down your own assets so you can hold out for larger Social Security checks may not be the most prudent plan.
Reason No. 3: To enjoy retirement more
Just because your finances may allow you to delay the day you start to collect Social Security, that doesn't mean you'll want to. That's because the earlier you retire, the more you'll be able to enjoy it. You'll be younger, presumably healthier, and more capable of engaging in whatever activities make you happy -- whether that means, traveling, hiking playing tennis or golf, gardening, or just playing with your grandchildren. And after all, some of us won't live as long as we expect.
Those are just a few reasons to start collecting your Social Security benefits early. So before you start making plans based on the idea that you'll start collecting them late, take a little time to review your reasoning -- and remember that it's possible to find a few other ways to increase your Social Security benefits at least a little, too.
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