What Is The Maximum Social Security Benefit At Age 62?
You have an important decision to make when you reach 62 years of age: Apply for early Social Security retirement benefits or wait until you reach full retirement age. If you wait, the maximum monthly benefit would be $3,345 in 2022. Taking an early retirement at age 62 reduces the maximum benefit you can receive to $2,364.
Adding a twist to your decision about early retirement is the fact that someone who elected to not retire early, and instead waited until they turned 70 in 2022, would be eligible to receive maximum Social Security retirement benefits of $4,194 each month. As you consider your options, continue reading for additional information to help you decide what to do.
Factors To Consider About Early Social Security Retirement
The opportunity to have what is essentially free money each month may be too tempting to resist, but you need to make an informed decision that considers all factors, including:
- Taking a Social Security benefit at age 62 is the amount you would otherwise get by waiting until reaching the age when you become eligible for full retirement.
- If you continue working while receiving early retirement benefits, there is a limit on how much you may earn without it affecting your benefits.
- If your current health and family history point to a long life expectancy, the reduction in monthly retirement benefits adds up to a sizable loss when calculated over the remainder of your anticipated life span. According to the Social Security Administration, men who are 65 years old in 2022 have a life expectancy that is 6 years more than when the Social Security system began in 1940, and 7 years greater for women.
Health insurance coverage is another factor to take into consideration in deciding to retire at age 62. Medicare coverage generally does not begin until you are 65 years old, so that should be a concern if you plan to leave your job and lose health insurance provided by your employer.
How Much Are Retirement Benefits Reduced By Work Earnings?
If you opt to take early retirement the maximum Social Security benefit at age 62 is less than you would receive by waiting until reaching the age you become eligible for full retirement. Full-retirement age is based on your year of birth. However, early retirement benefits are subject to an additional reduction when you have earnings from a job.
Working while collecting early retirement benefits results in a $1 reduction in monthly benefit payments for each $2 received in annual earnings in 2022 of $19,560 or more. The earnings limit is $51,960 for the year you reach the age for full retirement with a $1 deduction for every $3 in earnings for that year. There is no earnings deduction after you reach full retirement age.
If you receive benefits through the Supplemental Security Income program, be mindful that early retirement benefits could affect your SSI benefit. The retirement income must be reported to SSI, so speak with an SSI lawyer at MJ Ellis Disability Law for advice before applying for early retirement.
Early Retirement Benefits And Disability
If you cannot work because of a physical or mental impairment expected to last for at least a year, Social Security disability benefits may be a better option for you than taking early retirement at age 62 and before reaching full retirement age. Applying for Social Security Disability Insurance benefits avoids the reduction in benefits associated with early retirement.
Approval of your SSDI application results in monthly cash payments that automatically convert to retirement benefits upon reaching the age for full retirement. You get your retirement benefits without a reduction that would have been imposed had you retired early. Another benefit of SSDI instead of early retirement benefits is that you become eligible for Medicare after receiving SSDI benefits for 24 months.
An option for someone with a qualifying disability is to apply for early retirement and SSDI at the same time. There is, however, a degree of risk involved with this option.
SSDI applications take time to process, so by filing simultaneously for disability and early retirement, you can start receiving retirement benefits until the disability application is approved. Once that happens, you get your full SSDI benefit, but the risk of a simultaneous application is that you are subject to the early-retirement reduction when your SSDI converts to Social Security retirement unless it is determined that you were disabled before you began receiving early retirement.
Get Help From A Social Security Disability Lawyer
If you have a disability that prevents you from working and may qualify you for SSI or SSDI, avoid the temptation of early retirement at least until speaking with a Social Security disability lawyer at MJ Ellis Disability Law. A free consultation with an SSD lawyer may help you to avoid costly mistakes.