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Social Security — just say ‘no’

By Jennie L. Phipps · Bankrate.com
Tuesday, August 6, 2013
Posted: 7 pm ET

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.

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131 Comments
wolf2525
October 01, 2013 at 10:00 pm

The company I worked for closed after 4

Vic
October 01, 2013 at 5:56 pm

Agree with SA above. Although it is best to wait until age 66, many can't wait. That's one of the reasons we have SS. And it's good that it's there - people will need it more than ever in the future as the American dream is stolen from the producers and the loot is given to the moochers. Perfect example: Obamacare - it's just a wealth transfer program from the producers to the moochers - and it starts today.

SA
September 26, 2013 at 11:25 pm

Just as Gerald and Glen said, sometimes you don't have a workable alternative.

My husband's company just closed his division and out-sourced the work to India. Since the hand-off isn't going well, they've asked him to stay an extra month as well as travel to India to essentially train the replacements.

Sure, the company gave him a fairly decent separation package for his 18 years as an administrator. Decent, yes, but not enough to bridge the 5-year gap until 66. They'll pay out a portion of his pension but that doesn't add much. Our careful planning for retirement at 66 has been blown away.

If not for SS (I'm retired due to a work-related disability) we'll lose our house. So he chose early retirement; it's doubtful that at 61 he can get a position in his field or any field for that matter.

Great idea to hold off until 66, but in the meantime, how do we pay the bills? Health insurance? Property taxes? Help our severely handicapped adult son?

If anyone has an idea, I'd be happy to hear about it.

Jean
September 21, 2013 at 11:10 am

There are about 2 million retired teachers, state nurses, police and firemen and other civil service workers who would be happy to just have Social Security Fairness. America is a mobile society and because we often worked in different states and/or jobs where at some we contributed to SS and at some to a Private pension, with the WEP we lose up to 2/3 of our earned SS and with the GPO we also lose any benefit from our spouse now or as a survivor benefit. To as such a small number of us to pay such a price is wrong, unfair and causes hardship on us. Please educate yourselves to the WEP/GPO policies and join us in the fight for repeal.

Gerald DOutt
September 20, 2013 at 6:22 pm

And some of us have no choice. My company had a "voluntary" reduction in staff when I was 62. That meant that if I didn't take it, I'd still be let go, get no severence, or benefits. At least they kept me on their insurance program until age 65 when I got Medicare.

So to the writer of this article, if you can afford it, don't take Social Security until age 70. That was my plan. It didn't work out that way.

Pat
September 20, 2013 at 6:20 pm

There are a lot of people working at 62 that only make $16 or $18,000 dollars a year and it is a full time jobwith health insurance. I make about $17,000. it is hard to live on that in this day and age. Many have worked factory jobs and at 62 don't have the money to train for a different type of job. If the husband is deceased there is no second income coming in. With social security and a job you can save more up for when you do retire. Those making $25,000 or more may not need their social security and I'm sure they wait to draw.

Glenn
September 20, 2013 at 11:11 am

Try getting a job at 62. Ha. Not likely, unless you want to say Welcome to Walmart.

No Jones
September 13, 2013 at 4:47 pm

Is your employer telling you your healthcare/prescription benefits are part of your compensation and retirement? Then why do they shut them off when you go on Medicare? Why not for your entire life? Things that make you think hmmm...

al sayee
September 11, 2013 at 4:44 pm

Take the money and run*You need to pay bills now*Say at 64 you get 500 a month..Over a year you have received 6000..By the time you reach the retirement age..66..You have lost $12000..That is a lot of money..To me anyway..Are you sure you will survive that long??
"Make Hay While The Sun Shines".. AL SAYEE

Rob
September 10, 2013 at 9:15 pm

My question to all of the individuals taking ss at 62 - How are you all paying for health insurance until you are 65? This seems to be the biggest answer as to if I can retire early or not.