Social Security Benefits
22 Aug 2020 - Nuruddin Pethani
Photo Credit: Max Harlynking
“Noor, should I collect Social Security at 62 years, or should I wait? Dr. Xavier asked me.
The answer would be simple if only I knew till what age Dr. Xavier will be alive.
1) Social Security at Retirement Age, before or after:
The specified retirement age for claiming Social Security is increasing to age 67 for persons born in 1960 and later. You can claim Social Security as early as age 62 or as late as age 70 years. Social Security Benefits are calculated based on your earnings in the highest 35 years of employment.
At Age 62 – Benefits reduced by 30%
At Age 67 - Full Benefit
At Age 70 – 124% of Full Benefit.
If you live more than 83 years, you benefit by delaying taking your Social Security till age 70 years.
2) Early Social Security at age 62 if you are still working:
It does not make sense to collect Social Security at age 62 if you are still working for the following two reasons.
a. Your benefits are reduced by 50% for every dollar you earn above $ 18,240 for the Year 2020.
b. Your Social security benefits are taxable too: so if you are working, your tax bracket is higher.
See retirement benefits while working.
3) Spousal Benefits:
The Spouse will get 50% of your benefits even if he/she has not worked in their entire life. They also have the option of taking Social Security early at age 62 years with reduced benefits.
The rules are modified for persons born after Jan 2nd, 1954.
If you were born earlier, you had the option of either claiming your spousal benefits till Age 70 years and then your benefits (provided they are higher).
If you are born after Jan 2nd, 1955, you no longer choose between your spousal benefit until 70 years and then your own.
See spousal benefits until 70.
You should apply for Medicare Benefits at 65 years of age, even if you want to delay your Social Security Benefits.