It's my birthday. I'm 62 and old enough to claim Social Security. But I'm not filing. Here are four reasons why it's not part of my retirement planning.
Claiming early means I'd take a haircut. Taking Social Security before full retirement age -- 66 for people born between 1934 and 1954 -- reduces the monthly benefit by 25 percent.
I don't need it. Seventeen years ago this month, I used my unemployment to keep the family afloat while I started my own business. In the last couple of years, I've been racheting down the amount of time I spend working, but I like what I do and I'm not ready to hang up my work boots.
Working and claiming add up to missing money. If I file for Social Security before my full retirement age of 66 and keep working -- earning more than $15,120 -- Social Security will subtract $1 from my benefit payments for every $2 I earn. Once I reach my full retirement age, Social Security will recalculate my benefit to reflect the earlier payments I didn't get, but I'd rather keep my paycheck, thanks. Plus, once I reach 66, I can work and earn all I want and my Social Security won't be affected at all.
Patience pays off. The magic age is 66. That's when people my age can claim full Social Security and take advantage of claiming choices. Here's the strategy I'm considering. Because I'm married, at 66, I'll be able to restrict my claim to half my spouse's Social Security and let the value of my own grow 8 percent a year, plus cost-of-living adjustments, until I can claim the maximum amount at age 70. Using this strategy increases what I'll get in benefits compared to claiming at 66 or delaying altogether until 70 by more than $70,000 by the time I'm 85 -- more if I live longer than average, according to calculations by Social Security Income Planner, a sophisticated Social Security benefit calculator.
One last thing: I used to think 62 was over the hill, but I was wrong. At 62, I still feel like I'm only halfway up.