Here’s why I won’t be claiming Social Security benefits at 62 | Smart Change: Personal Finance

Many Americans choose to take the money and run by claiming Social Security benefits when they reach age 62. Others prefer to wait until full retirement age, which is 67 for those born in 1960 or later.

As for me, I’ve always been more of a Van Halen fan. Here’s why I won’t be claiming Social Security benefits at 62.

I fully understand why so many people choose to start collecting Social Security benefits as early as possible. They want to retire earlier to pursue other things they would rather be doing than working at their current job.

However, there is a hefty penalty for claiming Social Security at 62. For all of us born in 1960 or later, our monthly benefits will be cut by 30%.

If I had a burning desire to fully retire, I might consider making this big cut. But I love what I do – writing about investing and retirement planning. My goal is to retire by slowly reducing how much I write, without stopping entirely.

Can I claim Social Security benefits and continue working at 62? Secure. The problem, however, is that Social Security reclaims $1 from benefits for every $2 I earn above a certain threshold (which is currently set at $19,560). Although I can receive these foregone benefits when I reach full retirement age, this is not an attractive scenario for me.

Granted, not everyone is in the same position as me. However, many people who retire early from a job find that they would like to work in a different position. Even if it’s a part-time job, they could still face the same benefit cut.

You’ve probably heard that “a bird in the hand is worth two in the bush”. The idea is that a sure thing is preferable to a risky thing. And it’s arguably the number one reason for claiming Social Security benefits at age 62.

Applying for Social Security benefits as early as possible guarantees you a monthly check. The amount is of course less than if you waited until full retirement age. However, if you wait to claim benefits, chances are you won’t live long enough to actually receive lifetime Social Security benefits.

I have high expectations for my personal longevity. Yes, I realize that a horrible accident or a dreaded diagnosis can happen at any time. But I also know that I have always enjoyed good health. I do not engage in activities that could significantly reduce my life expectancy, such as For example, smoking cigarettes, skydiving, or keeping an alligator as a pet.

Genetics should also be on my side. My grandparents, great-grandparents and most of their siblings lived well above average. Some of them were still relatively healthy until the 90s.

I also think that there will be great advances in healthcare over the next few decades. Innovations in medical technology and personalized medicine could help extend the life expectancy of many people.

Each person has their own factors to consider when deciding when to claim Social Security benefits. The best decision for you could be very different from the best decision for me.

However, this is a decision most Americans will have to make at some point. It’s not too early to start thinking about what your retirement will be like. In the words of another classic rock song, “Don’t stop thinking about tomorrow.”

The $18,984 Social Security bonus is completely overlooked by most retirees

If you’re like most Americans, you’re several years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help boost your retirement income. For example: One simple trick could earn you up to $18,984 more…every year! Once you learn how to maximize your Social Security benefits, we believe you can step into the retirement we all seek with peace of mind. Just click here to learn how to learn more about these strategies.

The Motley Fool has a disclosure policy.