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Social Security: 3 Reasons You Shouldn't Apply for Benefits at 62

It's in some people's best interest to take Social Security as early as possible even though it could reduce their benefits by as much as 25%. But there are three circumstances in which it's best to wait until age 66 or later.

The first is if you continue working past the age of 62. If you do, and you earn above a predetermined threshold (currently $15,480 per year), then your Social Security benefits are temporarily reduced by $1 for every $2 in wages in excess of the limit -- this stops once you reach full retirement at 66.

The second is if you're optimistic about your longevity. If you're healthy and legitimately expect to live longer than the average American, then it would behoove you, at least financially, to wait until full retirement before receiving benefits.

And finally, if you have a spouse or other dependents that will receive survivors' benefits, it's often in their best interest if you hold out as long as possible. This is because the larger benefits associated with waiting will accrue to them even after you're gone.

The net result, as Motley Fool contributor John Maxfield concludes in the video below, is that you should be particularly attuned to these exceptions when you're deciding whether or not to apply for Social Security benefits prior to your 66th birthday.

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Read/Post Comments (35) | Recommend This Article (20)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 19, 2014, at 5:58 PM, garysund wrote:

    I have a good reason to retire at age 62 which for me is less than two years away. First of all my mothers side of the family does not have a pattern of living to a ripe old age. My mother died at 53 and of course never saw a penny of social security. My older sister died a the ripe old age of 66. She collected hers for one whole year. My younger brother is not in the greatest of health and it remains to be seen if he will ever get a Penny of what he paid into the system. So if I am lucky enough to live another seventeen months you had better believe I am going to collect early. If I live to be 90 then I will have to figure a way to survive.

  • Report this Comment On May 19, 2014, at 6:37 PM, Jag1 wrote:

    I'm going to start at 62 reason dad gone at 60 brother gone at 57. Other brother gone at 46 . All my aunts and uncle on dad side all gone by 65 . Now why should I keep paying in. Collect all I can get for my family. Other wise the government will just waist it.

  • Report this Comment On May 19, 2014, at 6:47 PM, segarolow4 wrote:

    I can give you three!!!!!!!!!

    1. Take it as soon as you can.

    2. Down size and get the hell out of dodge.

    3. You don't know how long you are going to live.

    So get it as soon as you can...

  • Report this Comment On May 19, 2014, at 7:27 PM, qmeng wrote:

    Who are these people to say like this ?

  • Report this Comment On May 19, 2014, at 8:20 PM, True411 wrote:

    Does anyone really think that SS will keep up with the rate of inflation? The way the Government calculates inflation is pure fiction.

    If you take SS early, the money will still be worth something.

  • Report this Comment On May 19, 2014, at 8:24 PM, jp1969 wrote:

    Take it ASAP & wait for what ? Remember,tomarrow is promised to no one.

  • Report this Comment On May 19, 2014, at 8:25 PM, Bake wrote:

    Take money at 62, invest it if you don't need it, why wait until Washington screws it up.

  • Report this Comment On May 19, 2014, at 9:15 PM, Inspector wrote:

    Only a Fool (Motley or not) would wait. Do the math, consider investment, Govt reliability/honesty , and lastly..... death.

    Get a grip folks......

  • Report this Comment On May 19, 2014, at 9:57 PM, gailretiree wrote:

    I am so sick of this wait until you are 66 or whatever. If I do that I'll have to stay in Utah that long. Also I'm not sure my employer won't fire me before that. I'd rather decide when I'm going to retire rather than have my employer decide. Really though, I'm not sure my employer would even keep me there until I'm 62--four years from now. I'd like to retire when I'm young enough to enjoy it. By retiring at 62 I'm looking at 4 to 5 more QUALITY years. As far as keeping my earnings under $15,480 a year--no problem. Do you really think I want to work enough to make that much money. I have been working since 1973 and I am tired of the stress and the abuse I've taken from employers. Just hope I can hang up for another four years!

  • Report this Comment On May 19, 2014, at 10:16 PM, goodenuff wrote:

    I agree and would love to "run away" at 62 but what will I do about health insurance for me and wife until Medicare kicks in at 65? I think Obamacare is over a grand a month.

  • Report this Comment On May 19, 2014, at 11:05 PM, Hotstock1 wrote:

    If your spouse receives SS when you reach 65, you can claim spousal SS benefits while you wait until 70 to take your own. Then convert to your own benefits when you reach 70 as the benefits grow 8% per year between ages 66 and 70. When you go, your spouse receives the higher benefits based on your higher benefits at age 70. The spousal benefits at 65 are not usually factored into equations to decide when to take your own SS benefits. Those spousal benefits for five years add up and lower the threshold of pain while waiting for your own benefits to kick in.

  • Report this Comment On May 20, 2014, at 2:05 AM, tonyatn wrote:

    One very big reason YOU SHOULD:

    You could be very sick or very old at 65 or 70 years of age.

  • Report this Comment On May 20, 2014, at 4:49 AM, peterde wrote:

    One thing he doesn't mention is that if you start SS payments at 62, continue to work and make over the limit, that they withhold 50% of your monthly payments not lose 50%. You do not forfeit it. You do not lose it. At 66, they must give it back to you. The only real drawback is that you will not get the 8% increase per year until you are 66. I plan on taking it at 62 this year.

  • Report this Comment On May 20, 2014, at 5:50 AM, WorldWarThree wrote:

    I looked at Mr. Maxfield's resume, very impressive, a six figure income, respect and physically easy. What if you are upper middle age, your body has been abused by decades of physically demanding jobs, modest pay, stagnant pay, your best years on the job are years behind you, no respect, you just can't function like 20 years ago, and you have the feeling that your boss would like to see you quit. Really think you can hold on to age 66? If you are at least age 55, and physically hurting, get a disability rating from your doctor, if the rating is high enough, file for Social Security Disability, and within 2 years of your application date, you will be automatically put on Medicare. Social Security Disability pays the equivalent of age 66 Social Security.

  • Report this Comment On May 20, 2014, at 7:09 AM, Volvoguy wrote:

    Add the numbers from 62-65 and see how long it

    will take you get that money back.

    Total BS to wait , my father got 10 checks before he died, my brother never got one check.

    Wait on what, I don't think so!!!

  • Report this Comment On May 20, 2014, at 8:29 AM, gadfly1000 wrote:

    hotstock1

    You are right, except it's 66, not 65.

  • Report this Comment On May 20, 2014, at 9:03 AM, colonelburton wrote:

    What a bunch of garbage. Yes, if you delay drawing SS, you can increase your monthly pay by 8%. Yes, if you continue to work because you want to or need to, then yes, don't draw SS. However, if there is nothing to keep you in the workforce and want to enjoy your hard earned retirement, grab SS as soon as possible. If you don't need the $$, invest it in something that will return >8%. Then, you at least have the $$ in your pocket.

  • Report this Comment On May 20, 2014, at 9:24 AM, Jnlaf wrote:

    Well it looks like the Government is at it again (paying people to write reasons NOT it start SS at 62),,I'm telling you take as soon as you can...you will not recoup what you would of got in the years you waited..The only reason the Gov. are paying these people to write this stuff is hoping you will die before you start you SS...

  • Report this Comment On May 20, 2014, at 9:29 AM, nontheist wrote:

    I'm 52. I just read (on Yahoo no less) that the SS trust fund runs out in 2033, how does delaying taking my full ss until 70 work if the system isn't solvent? I don't trust our congress to fix the problem since our political system is broken and serves only the oligarchy.

  • Report this Comment On May 20, 2014, at 9:46 AM, damilkman wrote:

    Come on folks. The author cannot account for your specific situation. The article was written for everyone including those who feel they are reasonably healthy and might live deep into their 80ties. The reality is that if you reach the age of 62 you have a very good chance of reaching the age of 90. If your spouse is several years younger then you, your spouse may live a couple more decades after you decease.

    The entire point is there are cases where it makes financial sense to wait. For those who know due to their unique situation that 62 is the right time, don't knock the author for being a good FOOL and pointing out when the right thing to do appears to contradict our instincts.

  • Report this Comment On May 20, 2014, at 10:00 AM, KSmith wrote:

    I was planning on retiring next year at age 62. I can't because the cost of privately purchased health insurance has jumped from $192/month to $782/month for a high deductible policy. I would have been happy to turn my job over to a younger person and retire at 62. Thanks to the interference of our government in the health coverage marketplace I have to work for 3 more years and take a job away from a younger person.

  • Report this Comment On May 20, 2014, at 10:09 AM, myliu888 wrote:

    According to my calculations -

    The break-even age is 77.4 if you wait to 66.2 versus 62,

    The break-even age is 79.8 if you wait to 70 versus 62,

    The break-even age is 81.9 if you wait to 70 versus 66.2.

    If you need the money - collect at 62.

    If you don't need the money - collect at 62 and invest it.

  • Report this Comment On May 20, 2014, at 10:09 AM, myliu888 wrote:

    I believe that the last 20 years of human life is similar to the first 20 years -

    that being - a person matures / ages progressively much more each year during those periods than a year during the middle period.

    Therefore, a person will be in much better physical shape to enjoy their first 10 years of retirement than the second 10 years.

  • Report this Comment On May 20, 2014, at 10:40 AM, kurtdabear wrote:

    Two good reasons to collect Social Security as soon as you can:

    1) A bird in the hand is worth two in the bush.

    2) Social Security is an actuarially unsound program that is continually changing the rules of the game to the detriment of recipients.

  • Report this Comment On May 20, 2014, at 10:58 AM, greyhound44 wrote:

    I retired 31 Aug 2003 at age 58.75 after having paid maximum (SS portion) of FICA for 35 + years which allowed me to receive maximum SS retirement benefits (reduced for age) at 62.

    Have not paid a dime in FICA since; only $199. in property taxes in the US since 2004 and NO income taxes since 2007. Never paid a dime in income taxes on my SS retirement benefits.

    That will change next year when I'll have to take MRDs on my just sub-US$2MM IRAs.

    My parents and grandparents lived well into their mid/late 80's,

    retired (healthy) expatriate (11 years at 6600 ft in Conde Nast's 2013 "World's Best City"). MD

  • Report this Comment On May 20, 2014, at 11:15 AM, greyhound44 wrote:

    The Congressional Research Service (a decent government organization) concluded a +/- couple of years ago now that if the "SS Caps"/

    taxable wage base were eiiminated the SS "Trust Fund" would be solvent for 70 years.

    Will never happen as all politicians and their contributors would be affected!

    retired expatriate

  • Report this Comment On May 20, 2014, at 2:44 PM, Disgustedman wrote:

    Males on my side of the family die before 70, I have paid into the system and want to relax and I'm tired of this "Wait for your benefits" BS...I WANT IT NOW!!!!!

  • Report this Comment On May 20, 2014, at 5:20 PM, duudaa wrote:

    Firs, I figure I still won't have a job at 62, so it will be a sort of long term unemployment. Second, who knows how long you will live. Third, its my money. Forth, all these constant articles about not retiring at age 62 tells me something is up and its not good!

  • Report this Comment On May 20, 2014, at 6:41 PM, Popeye1970 wrote:

    In the month of august I will be 62 years old, I retired at 60 years of age from a good company of 24years. But being retired, what I found out you don't exist so I decided to go back to work and now I am working full time, but being in the military for 12 years I found out civilian life sucks, if I wasn't so old I would be back in the military but with that being said I still plan on retiring at 62 because I can make more money with SS than I can working full time so I am going to work part time and I have most of my money in a annuity plus I bought a house that needs repaired that I will sell when done and open up another annuity because this house and the house I live in are paid for and I have health insurance through the company I work for and I can get health insurance free through the VA. For being the age of 62 years old even with all the aches and pain I like being busy.

  • Report this Comment On May 20, 2014, at 10:45 PM, sporked wrote:

    This propaganda is getting to be a daily disinformation campaign perpetrated on people approaching retirement.

    Take the money at 62 and run because......

    !) There are no guarantees how long you will live.

    2). The best and healthiest years are naturally when your younger not older.

    3). There are no guarantees how long you will live

    .

  • Report this Comment On May 21, 2014, at 12:02 AM, GETRICHSLOW2 wrote:

    Get every penny you can get as soon as you can. That's our strategy.

    This disaster simply cannot continue in it's current form and any politician in Washington who even talks about doing something about it is toast.

  • Report this Comment On May 21, 2014, at 1:49 AM, RxPro wrote:

    The authors are clearly writing these articles so they can take SS at 62 then watch as the benefits are cut and they end up getting more than those who waited until 60...

    Anyway, the breakeven point is 72-75 and if you don't need the money (which would be the only reason to wait anyway, duh) then investing it would bring an even better breakeven point of amost 90. If you wait until 65 you are an idiot. Or you have to/want to

    work for whatever reason, its as simple as that.

  • Report this Comment On May 21, 2014, at 5:31 AM, Eark1956 wrote:

    my roomate's sister makes $66 /hr on the laptop . She has been out of work for eight months but last month her check was $13852 just working on the laptop for a few hours. More Info................ http://x.co/4g9NA

  • Report this Comment On May 21, 2014, at 12:16 PM, fmatchett wrote:

    I've worked on a job that doesn't pay into ss, so 62 or 66 makes no difference, so take it at 62

  • Report this Comment On May 21, 2014, at 6:02 PM, sweetsandie wrote:

    I retired last November after turning 62 in July. With my pension from the county and my social security, I am living very comfortably and have no regrets. I love having the time and freedom to do what I want, when I want. I don't trust the government and I'm going to get what I paid in as long as I'm on this green earth.

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John Maxfield
JohnMaxfield37

John Maxfield has been writing for The Motley Fool since 2011 with a keen interest in helping readers improve their lives and become better investors -- himself included. He has a bachelor's degree in economics from Lewis and Clark College and a juris doctorate from Southern Methodist University. He's a licensed attorney in the state of Oregon, and resides in Portland with his wife and twin sons. View John Maxfield's profile on LinkedIn

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