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As related to this question and the calculator at ssa.gov, they tend to say: stop working at 62 and start claiming benefits at 62, or stop working at 70 and start claiming benefits at 70.

However, what if I stop working at 62, and start claiming benefits at 70? Should I just mark it as stop working at 62 and start claiming benefits at 62, but then, add 8% per year for 8 years (62 to 70), and about 3% inflation per year, meaning it is about 8 x 8% + 8 x 3% = 64% + 24% = 88% to the age 62 number, and assume that it is the number I get if I claim at 70 and will receive that for as long as I live, with a 3% inflation adjustment per year?

That's because I feel a bit horrified if I have to work from age 62 to 70... imagine interviewing at 65 and competing with all the candidates who are 28, 35, 38, or even 45.

Or what if we stop working at age 59 or 60, and start claiming benefits at 70? That calculator seems to use age 62 for stop working even if you enter an age under 62, and assume there is income in between that and 62.

keshlam
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Stefanie Gauss
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1 Answers1

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The answer is there on the site, but in brief: The earliest you can take social security is age 62. If you wait, then up to age 70, as you say, you're effectively getting a guaranteed (but see below) 8% growth on the money. That is a pretty good deal compared to other places to park the cash.

On the other hand, delaying may mean you wind up getting less money total, depending on exactly when you die. Which might affect how much you eventually leave to your heirs. So this depends in part on your guess at what your life expectancy is. Also, if certain politicians have their way, social security may yet be at risk; if you're concerned about it being cut, you might want to start it sooner. Or might not.

And of course your cash flow needs, and what's happening with your other savings, play into that choice.

Common default advice is to start payments when, or a bit before, you are actually going to need that income, or at 70 if you haven't already done so. But this winds up being a personal decision, based on your own needs and expectations.

Note that when you stop working has no direct effect on the formula... except that, since you're presumably now earning a higher salary, you're pushing lower-pay years out of the "ten best" list and increasing the payout that way, so it may help to continue working. Plus, of course, that gives you more years to build up savings to live on in retirement; social security alone probably won't do it.

keshlam
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