When to Collect Social Security

As you approach 62, you are probably wondering when to start collecting Social Security. Many advise that it is best to wait until you are 70, to reach your maximum benefits.

You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, Social Security will reduce your benefits. Starting with the month you reach full retirement age, they will not reduce your benefits no matter how much you earn.

The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2024, your maximum benefit would be $3,822. However, if you retire at age 62 in 2024, your maximum benefit would be $2,710. If you retire at age 70 in 2024, your maximum benefit would be $4,873.

Here are some legitimate reasons to take Social Security distributions at age 62, according to financial experts. You have health issues. You’re done working for good. You need cash to cover your expenses.

If you start taking Social Security at age 62, rather than waiting until your full retirement age (FRA), you can expect a 30% reduction in monthly benefits with lesser reductions as you approach FRA. Remember, FRA is no longer age 65: It’s 67.

You will pay federal income taxes on your benefits if your combined income (50% of your benefit amount plus any other earned income) exceeds $25,000/year filing individually or $32,000/year filing jointly. You can pay the IRS directly or have taxes withheld from your payment.