If you’re on the brink of your planned retirement date, then now is a good time to step back, assess your situation, and see if you’re really ready to take the final leap. After all, it’s quite a challenge to un-retire if you later realize that you’ve made a mistake. If any of the below circumstances apply to you, then consider moving your retirement date forward a year or two until you’ve dealt with the problem — even a brief delay may save you from financial disaster.
You’re younger than “full retirement age”
You can claim your Social Security benefits as early as age 62, but doing so comes at a price. Social Security’s “full retirement age” is the metric the agency uses to determine when you’re eligible for full Social Security benefits. It varies from 65 to 67 depending on the year you were born. If you claim your Social Security benefits before your full retirement age, your benefits will be permanently reduced by as much as 30%. In other words, if your full retirement age is 67 and your full retirement benefit is $1,500 per month, then claiming your Social Security benefits at age 62 will reduce your retirement benefits to only $1,050 per month for the rest of your life.
In certain circumstances, it makes sense to claim your Social Security benefits early. After all, while your benefit checks will be smaller, you’ll receive more of them. So, for example, if your health is poor and you think your lifespan will be shorter than the actuaries predict, then claiming Social Security benefits early may result in a higher total lifetime benefit than waiting until full retirement age. Finally, if you’ve managed to come up with so much retirement income that your Social Security benefits are just gravy, you could retire early and wait to claim Social Security until a few years down the line — or you may decide to file early and enjoy some extra “fun money” while you’re relatively young.
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