Sun Sep 22 2024, by Tyler Gardner
Should You Take Social Security at 62? Weighing the Options
Here are three reasons I should not take my Social Security benefits at 62 years old, and three reasons why I'm gonna do it anyway. I'm Tyler, a former financial advisor and portfolio manager, and now I create financial content for free to help you make informed choices.
Three Reasons Not to Take Social Security at 62
1. Reduced Monthly Benefits
By taking it at 62, I reduce my monthly benefits by 30%. I don’t care, because I will not see an aggregate gain until I’m 77 years old. That’s 15 years of living on less, and I’m projected to die in my early 80s.
2. Earnings Cap
By taking Social Security at 62, I have an earnings cap of $22,320. For every $2 I earn above that limit, $1 of my Social Security is withheld. But I'm not sure which channel you all have been watching, because by 62, I want to be fully retired. That’s why I'm investing for the long haul right now.
3. Missed Guaranteed Return
By taking it at 62, I would miss out on the equivalent of a guaranteed 8% return. Guess what? The S&P 500 has returned over 10% since its inception in 1957. So I’ll take my chances betting on the history of the markets over the future funding and existence of my Social Security guarantee.
Three Reasons Why I'm Still Going to Take It
Despite these concerns, I have my reasons for choosing to take Social Security early.
- **Immediate Cash Flow**: I need the immediate income it provides for my current living expenses.
- **Personal Strategy**: I have financial strategies in place that allow me to capitalize on early access while still maximizing my long-term wealth.
- **Uncertain Future**: In an environment of changing policies, accessing my benefits sooner rather than later protects me against potential future reductions.
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