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Dear Dr. Don,
I started receiving Social Security at age 62. I'm now 68. Will there be any increase for me or can I start
collecting at full retirement now?
-- James Juncture
Dear James,
You pay a price when you start collecting Social Security retirement benefits at age 62. That price is reduced benefits.
As stated on the Social
Security Web site, if you start benefits early,
they will be permanently reduced based on the
number of months you receive benefits before you
reach full retirement age. There's no bump up
in benefits when you reach full retirement age.
The only increases you'll see are in cost-of-living
adjustments.
That said, there is an interesting option to repay the Social Security retirement benefits that you've
received to date and to start over collecting benefits based on your current age. If you can make this work financially,
you could reapply for benefits based on your current age.
A recent USA Today article, "Have
your retirement cake early and eat it, too," describes
how people who began collecting Social Security
at 62 can later pay back the benefits they received
from age 62 and then start collecting benefits
at the rate for which they are eligible at that
later date. Someone in this circumstance could
start receiving benefits at age 62, repay the
benefits at age 66 and then start collecting at
the full retirement rate.
If you want to pursue this option, I suggest you consult with a fee-only financial planner to discuss the
costs and the benefits. The Bankrate feature "Financial planners: not just
for millionaires anymore" can help you select a financial planner.
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