It's popular to take Social Security at the earliest possible time, which for most people is when you turn 62. Many of those who choose to start getting Social Security checks at 62 do so simply because they can and because the money helps make their financial situation more comfortable. When you look more closely at Social Security, the program's complexities make it a lot harder to figure out an ideal time to claim benefits in order to get the most from the program. Many analysts focus on situations in which immediately taking Social Security at 62 is a bad move, urging people to consider waiting. For many people, the following reasons make it not only acceptable but actually smart to look at claiming Social Security as soon as possible.
1. For surviving spouses to get some benefits now and more later
The best reason to claim Social Security benefits at 62 involves a situation in which one spouse in a married couple has passed away. The surviving spouse then has the option to claim retirement benefits on the survivor's work history or survivor benefits on the deceased spouse's work history. Unlike with other common Social Security situations, a surviving spouse is allowed to choose to take one benefit without taking all applicable benefits at the same time.
As a result, one strategy involves taking your own retirement benefit at 62 while waiting until full retirement age to claim survivor benefits. Doing so results in a reduced payment from your own benefits, but the idea is that when you switch to the survivor benefit, you'll get a bigger monthly check. In this scenario, filing at 62 has the advantage of bringing some money in right away but also helping you maximize the payments you'll receive later.
2. To let your family claim benefits on your work history
Retirees used to have more flexibility in deciding when to take benefits and what impact their decision would have on family members. Recent law changes to Social Security have made it a lot harder for participants in the program to coordinate claiming decisions effectively. In particular, it's now universal that if you want to let your spouse or any eligible children claim spousal or children's benefits on your work record, you have to have filed for your own Social Security retirement benefit.
The situation in which this has the biggest impact is in a one-earner couple in which the working spouse is younger than the non-working spouse. For instance, if the working spouse is 62 while the non-working spouse is 66, filing for benefits allows the worker to get a retirement benefit and more importantly opens the door to the non-working spouse getting a full retirement-age spousal benefit. Every year that the working spouse waits denies the non-working spouse a year's worth of spousal benefits -- without any corresponding benefit for the non-working spouse from waiting. For children, waiting can result in getting nothing at all, because for most children, benefits end at age 18 or when a student completes high school. In these cases, it's better to claim early and let your family get something as soon as possible.
3. To grab whatever you can before a public pension takes your Social Security benefits
Workers who split their career between the public and private sectors and receive a pension from their public employment face a potential threat to their Social Security. The Windfall Elimination Provision can cut your Social Security by up to half of their public pension, with a maximum reduction of $442.50 per month for 2017 if you've worked 20 or fewer years in the private sector. For some, that can result in the complete elimination of your Social Security check.
Therefore, it can make sense to claim Social Security at 62 if your pension won't kick in until a later time. That way, you'll at least be able to get a few years' worth of Social Security benefits before the Windfall Elimination Provision acts to take them away.
When to claim Social Security can be tough to figure out, and it makes sense to look at the factors involved before making a final decision. If these reasons apply to you, then they can be a compelling rationale for claiming your Social Security benefits at 62.
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