3 reasons to claim social security benefits early
The age at which you register to collect Social Security determine how much money you are entitled to each month. Your initial monthly benefit is calculated based on your earnings during your 35 best-paying years of employment, but once that benefit is established, you have the power to increase, decrease, or maintain it.
If you are applying for social security on your specific date full retirement age, or FRA, you’ll get the exact monthly benefit your income history entitles you to. (FRA is either 66, 67 or 66 and a number of months.) During this time you can apply for Social Security before FRA for a reduced benefit from 62 years old or delay your declaration to the FRA and increase your benefits by 8% per year, until the age of 70.
From a cash flow perspective, filing Social Security on time or beyond FRA makes the most sense. This way you don’t face a reduction in your monthly benefit. But depending on your professional situation, it may be advantageous to apply for benefits earlier. In fact, here are three employment-related reasons why it pays to register for Social Security before FRA and take that monthly hit.
1. You lost your job
Many older workers are forced to quit their jobs due to downsizing, management changes or even ageism (which, to be clear, is illegal, but enforcing this rule may be easier to remove. say what to do). Of course, the problem with losing a job later in life is that you may have a harder time getting hired again than a younger worker.
Companies are often reluctant to try their luck with older employees lest they invest time and money in training, only to have these workers retire within a year of their due date. hiring. If you’ve been made redundant and finding a new job has been difficult, you may, frankly, need to register for Social Security before FRA arrives.
2. You hate your job
You may have the option to continue doing your job, but it makes you miserable. If so, and you’ve saved enough for your retirement, you may have earned the right to leave the workforce a few years earlier than expected. That way, you won’t have to train for a job you hate when you’d rather play golf or hang out with your family.
In this sense, applying for Social Security insurance could allow you to carry out another job, such as a business that you run yourself, that you not despise. This way you will continue to earn money, but you will have the option of falling back on Social Security if it takes time for this business to start.
3. Your job is bad for your health
If your job is extremely stressful, it could pose a health hazard, especially if you have underlying conditions that stress is known to exacerbate. Once you reach a certain age, you need to be honest with yourself about your physical well-being, and if your job has the potential to negatively impact your health, it makes sense to claim safety. social early so you can leave.
The same is true if your physical working conditions put you at risk of health problems. For example, many older workers don’t have work that can be done remotely, and right now, during the coronavirus pandemic, that’s a dangerous thing. Filing a Social Security declaration to be able to quit your job could therefore prevent you from falling ill and suffering long-term consequences.
Applying for social security early is not a decision to be taken lightly. But in these scenarios, it’s a decision that certainly makes a lot of sense.