Most of the advice that you read concerning Social Security advises that you consider waiting as long as you can before taking your benefits. Yet for some people, claiming at the earliest available age of 62 is actually the best thing they can do. Below, we'll run through three scenarios in which it's smart to take your benefits at 62.
Scenario 1: When you want to wait to take larger survivor benefits.
If your spouse has passed away, then you have the right to claim either your own retirement benefits based on your work history or survivor benefits based on your deceased spouse's work history. Even after recent law changes, you still have the right to choose to apply for one set of benefits while leaving the other untouched.
If your own retirement benefit is relatively small compared to the survivor benefit you're entitled to receive, then it often makes sense to collect your own retirement benefit first and later switch to your survivor benefit. That way, you'll avoid the reduction in the survivor benefit that would result if you claimed it early, but you can still collect at least some Social Security benefits because of your own work history.
Scenario 2: If a public pension will reduce or eliminate your Social Security later.
If you are entitled to a pension because of service as a public employee, two provisions can adversely affect your Social Security benefits. The Government Pension Offset can reduce spousal benefits you're entitled to receive if you worked at a job that didn't pay into the Social Security system through payroll taxes, cutting your benefits by as much as two-thirds of what you receive from your pension. The Windfall Elimination Provision does something similar with your own Social Security benefits, applying if you worked part of your career as a private employee paying Social Security payroll taxes but also worked as a public employee long enough to earn a pension.
If you know that your pension will eat up all of your Social Security benefits once you start receiving it, then claiming Social Security at 62 before your pension kicks in could be the only time you get benefits. As a result, it makes sense to get something rather than nothing -- no matter how small the something might be.
Situation 3: You have a spouse and minor children who are entitled to benefits now but won't be later.
Relatively few retirees are in a position in which they have minor children that they're caring for. But a combination of having children late and marrying a younger spouse can sometimes put 62-year-olds in a position in which they have children who are eligible for Social Security.
Children's benefits are available to those who are under age 18, or in high school and either 18 or 19. Disabled children are entitled to benefits even after they reach age 18 as long as they became disabled before age 22. The benefit amount is 50% of your retirement benefit, and your spouse caring for your child can also receive 50% as a spousal benefit until the child reaches age 16.
So as an example, say you have a 14-year-old who's entering ninth grade and you've just turned 62. Your spouse is 55. If you claim now, your child will get children's benefits for four years until graduating from high school, and your spouse will be able to claim spousal benefits for roughly two years until your child reaches age 16. Those are benefits that you won't get if you wait until full retirement age to claim. In some cases, those benefits can be enough to offset the benefits of waiting and push you to claim early.
Social Security experts are right to urge people to think about waiting before claiming Social Security. But that doesn't mean that taking benefits at 62 is always wrong. In cases like this, it's a smart move to take what you can get while you can still get it.
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