There has been a lot of speculation about how long Social Security will be around and in what form it will be in the future. Figures vary but it is reported that the trust fund will start running at a deficit in 2018 and will be unable to pay full benefits by 2040. I have 22 years until I can file for Social Security so I decided to do some research on Social Security.
I was surprised to find out that you can file at 62 and still get your full benefit amount at age 70. With the uncertainties surrounding Social Security I would prefer to start getting my benefits as soon as possible. In order to get benefits at 62 and still get full benefits at 70 does require some work. The Social Security Administration allows you to “withdraw your application” for benefits at 69, reapply at 70, and get the same larger monthly check as someone who delayed taking Social Security until that age. The catch is that you have to pay back all benefits you have received. You won’t have to pay interest on the money though and you can get either a tax credit or tax deduction on any income taxes you paid on the Social Security.
This works if you are able to save and invest your Social Security benefits. Doing this gives you will roughly $20,000 in earnings if the benefits are saved at 5%. In addition to the extra $20,000 you will also have a significant increase in the amount of Social Security benefits. For those born after 1960 like myself there is a 77% increase in benefits from age 62 to 70. This option may not be around by the time I’m ready to file for benefits but for those retiring soon it is something to consider. For a more detailed look at the math involved visit the Retire Early Home Page.