Social Security retirement benefits are meant to take care of you after your retirement. Social Security has different retirement ages depending on the birth year, but the current lowest retirement age is 66. However, you can apply for and start receiving your retirement benefits as early as age 62. You can, but it doesn't mean you should. Here are four reasons it may not be wise to go for early Social Security retirement benefits:
You Receive Reduced Benefits
Social Security makes it clear that those who opt for early applications are entitled to reduced benefits. Early application results in a maximum reduction of 25% for those with a retirement age of 66 and 30% for those whose retirement age is more than 66. The more you delay, the lower your reduction of benefits is.
You May Be Penalized If You Are Still Working
Social Security may penalize you if you are working and receiving the benefits simultaneously. As of 2016, anybody receiving the benefits while also earning over $1,310 per month gets some money subtracted from their retirement check. For every two dollars you receive, your benefits are reduced by a dollar. The penalty only stops once you reach your full retirement age.
Therefore, your options would be to stop working and receive the full checks (don't forget you won't be getting your salary) or continue working and receive your full salary and reduce retirement benefits.
You Have To Stretch Your Retirement Benefits
For many reasons, one of which is the reduction of benefits explained above, many people who apply for early retirement actually do retire. When you retire early, you start using your retirement savings, such as your IRAs, early. This means you have to plan well and stretch them to last the rest of your lifetime; otherwise, you may suffer later in life.
You Have To Look For Alternative Health Insurance
Health insurance is important for everybody, but it is necessary for senior citizens since they are more prone to illness than their younger counterparts. Unfortunately, retiring early strips you of your employer-provided health insurance. At the same time, you aren't eligible for Medicare until you reach the age of 65 (unless you meet the eligibility requirement for one of the
Evaluate your unique circumstances to know whether the disadvantages outlined above matter to you. The main thing is to approach the issue with care; don't make a spur-of-the-moment decision. For more information on social security, talk to a professional like Todd East Attorney at Law.