Embarking on the Social Security journey at age 62 is akin to setting sail on the high seas before dawn – tempting yet treacherous. The siren’s call of early benefits beckons, but beware: claiming too soon may mean navigating choppy financial waters ahead.
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Setting Sail: The Average Social Security Benefit at 62
As of December 2023, the average Social Security benefit at 62 stands at $1,298 for retired workers, translating to $15,576 annually on a modest life raft. Men and women receive differing amounts, with men averaging $1,439 monthly ($17,268 yearly) and women at $1,167 per month ($14,004 annually).
A 3.2% cost-of-living adjustment (COLA) in January 2024 raises the average monthly benefit to $1,339, or $16,068 annually, for 62-year-olds. After the COLA, men would likely receive $1,485 monthly (around $17,820 yearly), and women around $1,204 monthly ($14,448 annually).
Diving deeper into the abyss of early claiming reveals a 30% reduction in benefits at 62 compared to full retirement age, courtesy of Social Security’s incremental deductions for premature claims. Each year of waiting past full retirement age, however, unveils a treasure trove of an 8% increase in benefits up to age 70, akin to discovering hidden riches on a deserted island.
Venturing Further: Unveiling the Maximum Benefit at 62
Dream of hoisting the maximum social security sail at 62 with a monthly reward of $2,710? A history of 35 years of contribution and earning Social Security’s maximum taxable earnings for each of those years, currently set at $168,600 in 2024, is a prerequisite for this grand bounty.
As the sun sets on full retirement age, the horizon reveals a richer $3,822 maximum monthly benefit. Those who wait until age 70 to dock their ship may enjoy a sumptuous $4,873 monthly feast.
Plotting a Course: Undoing Early Social Security Claims
If you hastily cast off at 62 and yearn to return to port, Social Security offers two lifelines. Within 12 months, you can withdraw your claim in writing, repaying any benefits received. Alternatively, at full retirement age or below 70, suspending benefits allows you to accrue delayed retirement credits until you choose to reinstate – a rare opportunity amidst the stormy seas of early claiming.
Ahoy! Remember, reversing course on Social Security is a challenging endeavor. Proceed with caution before setting sail early, especially if the winds of opportunity allow for a delayed departure.
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