Retiring at 62 is an appealing option for many people. However, it’s important to weigh the potential downsides before making a decision. Here are some of the disadvantages of retiring at 62:
- It could be bad for your health. Studies have shown that people who retire early are more likely to experience health problems. This is likely due to the fact that they are less active and have less social interaction.
- Your Social Security benefits will be smaller. If you retire at 62, you will receive a reduced Social Security benefit for the rest of your life. This could make it difficult to maintain your standard of living in retirement.
- Your retirement savings will have to last longer. If you retire at 62, you will need your retirement savings to last for a longer period of time. This means that you will need to save more money or be more careful with your spending.
- You’ll need to find health insurance. If you retire before you are eligible for Medicare, you will need to find health insurance on your own. This can be expensive, especially if you have health problems.
- You might get bored and miss working. Retirement can be a big adjustment. If you are used to working, you may find that you have a lot of free time on your hands. This can lead to boredom and loneliness.
Additional Considerations:
- Your spouse’s age. If your spouse is younger than you, they may not be eligible for Social Security benefits until they are 62. This means that you would need to support both of you on your reduced Social Security benefit.
- Your health care costs. Your health care costs are likely to increase as you get older. This is something to consider when planning your retirement budget.
- Your lifestyle. If you are used to a high standard of living, you may need to adjust your expectations in retirement.
Retiring at 62 can be a great option for some people, but it’s important to be aware of the potential downsides. If you are considering retiring early, be sure to do your research and talk to a financial advisor to make sure that it is the right decision for you.
Frequently Asked Questions
What is the full retirement age for Social Security?
The full retirement age for Social Security is 67 for people born in 1960 or later.
How much will my Social Security benefits be reduced if I retire at 62?
Your Social Security benefits will be reduced by 30% if you retire at 62.
How much do I need to save for retirement?
The amount of money you need to save for retirement will vary depending on your lifestyle, expenses, and life expectancy. However, a good rule of thumb is to save 10-15% of your income each year.
What are some tips for staying healthy in retirement?
- Stay active and exercise regularly.
- Eat a healthy diet.
- Get enough sleep.
- Manage stress.
- See your doctor for regular checkups.
What are some things to do to stay busy and engaged in retirement?
- Volunteer.
- Travel.
- Take up a new hobby.
- Spend time with family and friends.
- Learn a new skill.
Additional Resources
Disclaimer
I am an AI chatbot and cannot provide financial advice. The information provided above is for general knowledge and informational purposes only, and does not constitute professional financial advice. It is essential to consult with a qualified financial advisor for any financial decisions.
Spouses and Social Security
You can use your spouse’s work history to apply for Social Security benefits. If you claim your spouse’s benefits before your FRA on their record, you will lose even more than if you claim your benefits on your own record. According to E2%80%94, the benefit reduction for claiming a spouse’s record is $3355%, while the benefit reduction for claiming your own benefit is $3300%. For example, if you are the spouse of Colleen in the above example and you are the same age, you would only be eligible for $650 a month at age 2062%E2%80%9435% less than the $1,000 a month you would receive at your FRA of 67.
Your decision to take benefits early could outlive you. Your spouse would be entitled to your monthly survivor benefit if you passed away before them, provided it was greater than their own. However, if you take your benefits early, say at age 66, as opposed to waiting until age 70, your spouse’s survivor Social Security benefit may be reduced by 30% for the remainder of their lifetime.
The downside of claiming early: Reduced benefits
Consider the following hypothetical example. Colleen is 62 as of 2022. Colleen will get about $2,000 per month if she waits to collect until she is 67 (her FRA). But if she starts receiving benefits at age 62, she will only get $1,400 each month. This 20%22early retirement 20%22penalty is permanent and causes her to receive 20%30%20less%20year after year
But if Colleen waits until she is 70 years old, her monthly benefits will rise by an additional 22.4 percent above what she would receive at her FRA, for a total of $2,480% per month. 1%20If she lived to age 89, her lifetime benefits would have been approximately $112,000 more, or at least 2.4 times higher, because she waited until age 7.0 to receive Social Security benefits. 2 (Note: All amounts are in current currency and do not include taxes.) The actual benefit would be subject to income tax and would be adjusted for inflation. ).