Social Security at 62?

I am 64 yo now. I retired from a federal LEO job at 50 with 20 years in - The minimum to collect my pension. Also a partial from a state agency I had 10 years with. Began collecting SS at 62. A nice benefit to a fed LEO retirement (Air Traffic Controllers and firefighters too) is that since mandatory retirement is below the SS age of retirement, you receive an additional stipend that is approximately equals half your expected SS amount at 62. This ends at 62, when you begin to collect SS. Frankly, I don't know how people retire with just SS alone.

I could have stayed to mandatory retirement - 57, but I have seen too many guys retire from a LEO job at the maximum retirement age, then die before they can enjoy it.

With hindsight, I am glad I went at 50. Got to spend a lot more time enjoying my hobbies than if I had gone at 57, as the past several years have seen a reduction in my "outdoor time" do to a back and leg injury catching up with me.

Larry

I drew it at 62 and never looked back. My military retirement provided my medical so waiting till 65 for Medicare wasn't an issue.

Mike said:

Absolutely true. I did it too at 62.......And nobody knows their die date. So you loose $$ by waiting years for a larger amount......That's what the gov. wants you to do so's iffen you die they owe you nothing

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^^^^^^^^^^ what he said! As the song goes. Take the money and run.

madmikeb said:

The worse thing is I can't get medicare until 65 so I do have to buy insurance.

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this. Try buying an individual health insurance policy before 65. You'll pay through the nose. My little brother retired this year. He is 67, the full retirement age for social security BUT his wife is only 60 and so he has to buy an insurance policy for her until she reaches medicare age. Can you spell expensive. Unless you got a working spouse who can keep you on group insurance until both of you reach 65, retiring early makes no sense-at least to me.

I'll chime in. Way back in the last century, my employer was offering golden parachutes to worker bees who made the magic number of 82(?). This was age plus years of service. If you'd made the magic number and were too young for SS, the company would pay the SS amount (or the difference between pension and wages?). Surprising number of folks who wouldn't retire. Even when we showed the guys they were actually paying the company to work!. [One guy about $1.75 an hour, the other ~$1.50.]

Years pass, the shoes on the other foot and I was contemplating retirement. I suddenly understood those old codgers point of view*. Financial uncertainty (and what I was making) was the issue(s). Working on what turned out to be bad numbers on SS payments wasn't helping, and I was working past full retirement age. I finally got correct numbers on the SS payout and bailed.

Now then: SSA will have the most accurate numbers on what they'll be paying you. Your payment will depend upon lifetime earnings. (That's important).

As mentioned, if you bail before full retirement age, your benefits are reduced and you're limited in what you can make before SSA starts looting your payments.

If you work past full retirement, your benefits go up by 8% for each year you work past full retirement up to age 70. I can count on the fingers of 1 hand the years I got an 8% or better raise. If you don't file until you finally retire, or file and tell them to hold the checks, you can take the cash as a lump sum, extra monthly money or a combination.

If you have an IRA, depending upon how invested, you can take your RMD as an "in kind" distribution. I hold shares, the RMD is a share transfer to another account that lets me keep the investment for growth & dividend purposes. Yeah, still gotta pay taxes, but the growth potential is still there.

*There were a couple of factors here. Many of the guys were depression era folks and a man's identity and worth were reflections of their jobs. Age was another factor. We had one guy who started way back when as an apprentice at 16 another at 14 and 30+ years of service. Heck, my old man took an early pension (another company) at 58 rather than a job downgrade with 43 years of service.

CAJUNLAWYER said:

this. Try buying an individual health insurance policy before 65. You'll pay through the nose. My little brother retired this year. He is 67, the full retirement age for social security BUT his wife is only 60 and so he has to buy an insurance policy for her until she reaches medicare age. Can you spell expensive. Unless you got a working spouse who can keep you on group insurance until both of you reach 65, retiring early makes no sense-at least to me.

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This is where we are in my household. I did have a personal health insurance for a while in my early 50s. It was pricey. If we can make to my 65th on my wife's health insurance, we're good.

BillBond said:

IMO the thing to consider most before retiring is Medical insurance.
Medicare doesn't start until you are 65.
If you have access to a plan, great.
But if you need to buy it on your own, the price is staggering.

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My wife is 60, 5 years to go for Medicare. She pays a little short of $600/mo for full coverage (basically COBRA equivalent from employer). Joe

WR Moore said:

I'll chime in. Way back in the last century, my employer was offering golden parachutes to worker bees who made the magic number of 82(?). This was age plus years of service. If you'd made the magic number and were too young for SS, the company would pay the SS amount (or the difference between pension and wages?). Surprising number of folks who wouldn't retire. Even when we showed the guys they were actually paying the company to work!. [One guy about $1.75 an hour, the other ~$1.50.]

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I know a guy who had a pension plan that paid 80% of salary after 20 years service, regardless of age. Staying longer didn't get you more than the 80% (although if there were pay raises the 80% would obviously mean a higher dollar amount, but then again, the pension had a COLA as well). He hit the 20 year mark at 60, but stayed on another 10 years until the mandatory retirement age of 70. I kept wondering, why work for 20% of your salary for ten years? Then I realized that with the deduction that he was still contributing to the plan without any additional upside, he was really working for something like 8%. But he was one of those guys who considered himself too vital to the organization to leave until forced to. Of course, they somehow managed to survive just fine without him.

I turned 65 this summer, my full retirement age is 66 and 8 months, I was planning on waiting until then to retire. One of my twin son's, his wife and 2 grandsons moved out of state this spring. My wife and I have visited them several times since they moved, spending long weekends with them. I miss seeing them on a regular basis and I made the decision to retire early so we could spend more time with them. I looked at what I would loose in SS if I left early and it amounted to a couple of hundred dollars or so a month. I considered what I will be collecting by leaving early versus what I would gain by working until my full retirement age. I'm money ahead until age 78. Based on my family history it will be a miracle if I live that long. I told my wife, who is already retired, that I was going to retire and she insisted that I continue to work. I told her my mind was made up and that we had enough in our 401k's to supplement our income when I retired. She wasn't happy, I arranged a meeting with our financial advisor who insured her that we had plenty of retirement income saved and my retirement would not affect our lifestyle. After talking to our financial guy she has since warmed to the idea, especially since I insisted I was retiring whether she liked it or not.

I set the wheels in motion and I am just waiting to get my Medicare and supplemental health coverage set up before I tell work I'm leaving. It's the best decision I've ever made. Already booked a Canadian fishing trip with the son who moved out of state and a Hawaii trip and another fishing trip with my other son and my twin grand children.

So many people work their entire lives, retire and them drop dead without ever enjoying themselves later in life, not me!

ADD: Just found out my nieces husband, age 49, had another stroke, that's his third in 9 months. He fully recovered from the first two, waiting to find out how he fares after this last one. Life is to short, enjoy yourself while you can!

I retired at 59 1/2. Took income leveling. (Company match to what I'd get when when SS would kick in at 62.) At 62 took SS. WE were/are debt free That and pension make easy living. I wanted to go while I was still healthy and could do stuff. We have not touched our savings plans.
So here I am 9 years after retiring......Fat and Happy. I hunt 4-5 afternoons a week.(killed 6 deer so far this season) I shoot. I reload. I farm. Play in the woods & water. We travel when the urge strikes....We have truly been blessed by our Maker.

yaktamer said:

I know a guy who had a pension plan that paid 80% of salary after 20 years service, regardless of age. Staying longer didn't get you more than the 80% (although if there were pay raises the 80% would obviously mean a higher dollar amount, but then again, the pension had a COLA as well). He hit the 20 year mark at 60, but stayed on another 10 years until the mandatory retirement age of 70. I kept wondering, why work for 20% of your salary for ten years? Then I realized that with the deduction that he was still contributing to the plan without any additional upside, he was really working for something like 8%. But he was one of those guys who considered himself too vital to the organization to leave until forced to. Of course, they somehow managed to survive just fine without him.

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I definitely didn't consider myself too vital to the organization. However, looking at what 10 years of pay increases, PLUS the additional $$ to lifetime earnings for SS might make a lot of difference. COLA adjustments are often a joke. Couple of mine would have bought me a Whopper a month-no fries or drink.

I understand that everyone is individual in their own ways and financial status, but I would say this, If you are 62 years and one month of age and are not drawing a SS check, you need to take a week vacation and spend a great deal of time alone, pondering life's questions of why do I work? Why have I worked all my life? what is my future? where do I see myself in 5 years and 10 years?

Please re read Lobo great post. Tomorrow is promised to no one.

I am now 74 1/2 and retired four months before my 62nd birthday or 5 months before the first SS check. If you promise to not become a couch potato with no life, then you not only need to draw SS at 62, you need to quit you job. Even if life's finances have kicked you in the butt and you can not afford to retire, start the SS checks, now. I have never met anyone who had second thought about retirement that has actually made the jump, PS, none of you folk are going to live forever. I paid into this system since I was 16 and I am trying to 1) get my money back and 2) enjoy what few years I have left of this planet and that does not include working for anyone other that myself on projects I enjoy.

TX-Dennis said:

Another consideration, if you are married, is the age of your wife and her lifelong earnings relative to yours. In many (if not most) couples the man has higher lifetime earnings than does the woman. This results in his ss payment being higher than hers. Upon the death of a married person, his or her spouse gets to collect the higher payment for the rest of her life.

So, if your wife is younger than you are, you'd be doing her a favor by waiting at least until full retirement age unless her check will likely be equal to or higher than yours. That's why I'm trying to hang on until 67.

There are also some like a coworker who is 69. I asked him if he was thinking of retiring soon. He said he can't because he has to pay child support for his 10 year old for another 8 years.

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GEEEEZZZ!!
WHAT WAS HE THINKING!
I guess he wasn’t . . .

I am self employed and still take on a limited number of jobs per year at 65. House, equipment and vehicles are mostly paid off.
I took ss at 62 and have been investing (mostly in S&W) the extra money. Works for me so far.

I am taking mine at 62, which comes next October. Break even point for me between taking it now or at 67 is 81 years old. Most of the men in our family passed in their early 80's. Between my pension and SS I should be able to keep from dipping into my retirement savings too often.

Breakaway500 said:

A bird in the hand is worth two in the bush. I filed at 62 and kept working as I never plan on "retiring". Having that extra income paying my real estate taxes using "uncle Sams money" puts a smile on my face every day,

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Actually, it’s YOUR MONEY Uncle Sam is giving you back after keeping it for 40+ years.
I never understood people who want to work at a regular job until they drop. There are so many other things in life to do.
I have worked at several jobs over the years, about half the time in skilled aviation maintenance that paid pretty decent money, but I never had a job that I would have hesitated to walk away from in a heartbeat if I could have made it financially without working.

Work to live.
Not live to work.

yaktamer said:

I know a guy who had a pension plan that paid 80% of salary after 20 years service, regardless of age. Staying longer didn't get you more than the 80% (although if there were pay raises the 80% would obviously mean a higher dollar amount, but then again, the pension had a COLA as well). He hit the 20 year mark at 60, but stayed on another 10 years until the mandatory retirement age of 70. I kept wondering, why work for 20% of your salary for ten years? Then I realized that with the deduction that he was still contributing to the plan without any additional upside, he was really working for something like 8%. But he was one of those guys who considered himself too vital to the organization to leave until forced to. Of course, they somehow managed to survive just fine without him.

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Have known some who didn't want to retire, but am thinking for the ones i knew they realized no one had to listen to them once they did retire.

WR Moore said:

I definitely didn't consider myself too vital to the organization. However, looking at what 10 years of pay increases, PLUS the additional $$ to lifetime earnings for SS might make a lot of difference. COLA adjustments are often a joke. Couple of mine would have bought me a Whopper a month-no fries or drink.

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Makes sense in your case. But the guy I'm talking about was in SS exempt positions for most of his life, and the job was one for which pay increases were few and far between.

Everyone's circumstances differ, but the basic premise of SS actuarial calculations is that you will collect roughly the same amount no matter when you pull the pin. Retire earlier, get money now for presumably longer; retire and collect later at a higher rate but not as long.

My wife got a buyout at her hellhole of a University a couple years ago. We had 2 houses in different locations as our jobs were about 160 miles apart. We had paid extra on each as we could, which everyone should do if they can as it really cuts the total payment. $50/month early in a loan makes a staggering difference, and we did more than that every time we got in $$ we had not expected. The expense and annoyance of 2 houses was not trivial, but it paid off. We sold the eastern property for almost exactly the payoff on this house; IIRC it was maybe $1500 difference. Her buyout came in the new year with her essentially zero income, which helped with the net taxes. The buyout also allowed us to pay off the relatively new cars within a couple of months. As a result, we have no debt; we have monthly bills and pay off the credit cards every month (which improves our credit rating even more). We take enough from her pension to pay for insuance, and leave the rest alone. (I'm on Medicare due to ESRD, we buy hers and my supplement through the state plan she had at work).

Due to my ESRD, I am in a holding pattern due to treatment and waiting to get through the transplant process. My employer values me because I am old and useful, so the younger folks rely on my knowledge. I also do stuff that no one else likes/wants to do, and in combination I flex my time to work more or less 1100-1900, but I am available by phone and email after I get up. (11+ hours a night of peritoneal dialysis limits flexibility and the dozen or so meds I take in the AM are hard on me.)

We just got decent raises at my job (after years below, I got 29%) to reflect the market, and my pension is based on the highest 60 consecutive months. The more I stay, the high the average goes, and I will not have a lot of years in as I did not start in this system until I was 40. I expect to go to 67, maybe more if I have nothing else to do, and will start SS when I go. My wife will start SS when eligible, and the net effect is our household income will be about the same.

We are packing $$ away at this time, and if we can get the RV I want, will be able to pay a LOT down and have workable payments. It works for me, but your mileage may vary.

6.2% of your income goes to SS. I hope nobody is only expecting SS to pay them 6.2% of their current salary. Point being, you will probably get back a lot more than you put in. So, your’e not simply getting your own money back, you’re getting way more. The Fed will just wave a magic wand and make it happen, no worries

Yes, your employer also pays 6.2%, but if SS didn’t exist, or was structured differently, they would not give that 6.2% to you, not in a million years. Just sayin’.