Retiring at 62? Here’s How to Avoid Losing Money in Social Security and Get a Bigger Payment

Retirement is one of the most significant life decisions we make, whether we reside in the US or another country, because it requires a significant shift in how we live and handle our money.

Although the US Social Security System permits employees to begin receiving retirement benefits at age 62, this might not be the greatest choice if you want to increase your monthly payout.

Since the monthly payment will be significantly lower at age 62 than if you wait until later, applying for retirement at that age can have considerable long-term costs.

Because they can begin collecting benefits earlier, many people decide to retire at age 62, but doing so can cause them to lose a substantial amount of money in retirement.

The age at which you apply for retirement is one of numerous factors that determine how much you receive in benefits.

You lose out on the chance to get a larger payout if you retire early, which could significantly impact your quality of life over time.

Making an informed decision about when to retire requires knowledge of how Social Security operates in order to prevent mistakes.

Until the full retirement age is attained, the payment system is set up to boost benefits for each year that the application for retirement is delayed past the age of 62.

This can significantly affect the monthly amount received, which is important for people whose main source of income is Social Security.

The United States’ retirement requirements

Having worked and made contributions for a specific number of years is one of the requirements for receiving Social Security benefits. Generally speaking, in order to qualify, you must have accrued at least 40 labor credits.

Although 62 is the minimum age to begin receiving benefits, the amount of benefits will be permanently decreased if you file for retirement before you are of full retirement age.

Depending on the date of birth, each American citizen has a different full retirement age.

The complete retirement age for anybody born in 1960 or later is 67. You will be eligible for 100% of your benefits if you choose to wait until this age to retire, which may be much more than if you choose to retire at age 62.

How do you get the most out of your Social Security benefits?

Depending on when you choose to begin receiving benefits, you can use a number of tactics to optimize your monthly Social Security payout.

• Delaying retirement: The amount of benefits you receive each month might rise by up to 32% if you choose to start receiving them at age 70 instead of age. Although it necessitates careful financial preparation, it is among the finest strategies to optimize advantages.
• Work for 35 years: Your 35 years of highest-earning employment are used by Social Security to determine your payments. In the calculation, years in which you were unemployed or had minimal income are zeroes. You will be able to erase these years of low or no income if you work for more than 35 years, which would increase your benefits.
• Keep your pay high: Your Social Security benefit will increase in proportion to your wage over the course of those 35 years of employment. Your benefits can be greatly increased by making sure you are working in a well-paying job and making the maximum contributions to the Social Security system.