Claiming your Social Security Benefits at age 62 may sound great - but you could lose a lot of money in the next years. Waiting till you're 70 years old to collect your Social Security is recommended - even though you can start at 62. Mark Gardner of RetireWellDallas says there IS a penalty though. "They can receive it at 62, but - they will have to take a 25% haircut!" If you were born after 1943, every year after your 62nd birthday that you postpone collecting it, there's an 8% increase in your check. Gardner asks people, "Where can you get an 8% raise on your money plus cost of living? The [2023] cost of living adjustment [raise] will be over 8%. You just made over 16% by not taking your Social Security right now!"
Come January, People on Social Security will Get a Raise!
If you are still working and younger than 62 - Gardner says to save as much as you can now and postpone receiving as long as you can. "There are probably over a third of Americans who take their Social Security payments at the age of 62 - because they don't have enough in savings." Social Security Administration says only 10% of Americans wait to collect benefits at age 70. Their median gain in the present value of household lifetime discretionary spending is over $180,000!
The National Bureau of Economic Research says - Americans are notoriously bad savers and many need the money as young as 62.
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Waiting till you're 70 to collect Social Security adds many thousands of dollars to your retirement.