62 and You
Is now a good time to claim my Social Security, work part time or fully retire?
When it comes to Social Security, most of my clients have benefited from some type of Social Security Claiming Strategy. My own concept regarding Social Security has changed from thinking it is a (mostly) straightforward process to currently where I find myself learning something new on a regular basis. Recently a client came by and shared that Social Security had offered him a limited buyout of sorts.
As we get closer to 2034, the year the Social Security Trustees predict the program will be bankrupt#, we should look for even more creativity to make the available funds go as far as possible.
Ok back to the task at hand. You’re turning 62 and you want to know your Social Security claiming options.
Here’s a Summary (other options may be available to you):
You must have 40 Quarters of Coverage of participation in the Social Security System to be eligible for a benefit.1
If you never worked or worked fewer than 40 Quarters of Coverage, earning a minimum of $1,3602 for each Quarter, and you are married, married for 10 years and then divorced, you are eligible for a benefit, if your spouse has met the 40 Quarter requirement and as already filed.3
Your benefit will be 25% less than your estimated Full Retirement Age (FRA) payment4
If your spouse as already filed, you may get 100% of your benefit or 50% of your spouse’s, less the 25% for claiming early. Your discounted benefit will increase for every month you delay filing5
Once you begin claiming, this benefit (except for cost of living raises) is frozen6
If you have earned income above the maximum allowable, Social Security will retain $1.00 for every $2.00 you earn above the maximum allowable. Currently $17,040 for 2018.
No one can predict the future. Social Security may get some extra funding, our economy has record employment8 which generates additional Social Security inflows, your health may improve or worsen, wage inflation may be such that the money is just to good to pass up and you decide retiring at 62 is not for you.
Confusing? Most Financial Advisors will help you figure out what’s your best course of action, considering the impact of taxes, early filing discounts, inflation and the impact of various scenarios.
They will need a good amount of information in order to give you probable claiming strategies. Remember, the better the information you give, the more accurate the strategies will be.
2 Amount for 2019, see https://www.ssa.gov/OACT/COLA/QC.html#qcseries for a history of earnings
7 https://www.ssa.gov/planners/retire/whileworking.html #h1