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What Is The Average Social Security Benefit At Age 62

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What’s the Average Social Security Benefit at 62

The SSA website provides estimates for how much you’ll collect if you start receiving benefits at age 62, your full retirement age , and age 70. Remember that you don’t have to start taking your benefits at those milestone ages you and your spouse can start collecting anytime between ages 62 and 70.

An Advanced Claiming Strategy

If you or your spouse reached age 62 by the end of 2015, you qualify for a Social Security claiming strategy called restricted application.

Here’s how it works: The younger spouse claims Social Security benefits based on his or her own earnings record.

When the older spouse reaches full retirement age , he or she files a restricted application for spousal benefits only. At that point, both spouses are claiming benefits based on the younger spouse’s earnings record.

Then, at age 70, the older spouse claims benefits based on his or her own earnings record, which have increased to 132% of what that spouse would’ve been eligible for at FRA.

See how it works:Restricted application

Average Social Security Check By Type

While most people think of Social Security as a program just for retirees, it serves many other groups, including the disabled, spouses and minor children of retirees as well as the spouses and minor children of deceased workers. The amount that each group receives differs substantially.

In fact, the average retired worker receives $1,553.68 each month 9 percent more than Social Security recipients as a whole. Heres how the figures break down by recipient, as of May 2021.

Type of beneficiary
$1,280.17

The table shows the three major recipient categories in bold: retirement benefits, survivor benefits and disability benefits. The totals from these categories add up to 100 percent. The sub-category below each shows the top recipient of Social Security aid for that category.

As you can see, retirement benefits make up the vast bulk of Social Security 76.2 percent with most of that going to retired workers. The remainder in this category goes to spouses and minor children of retired workers, who receive a check of less than $800 a month on average.

Survivor benefits comprise 9.1 percent of Social Security benefits. The top sub-category is non-disabled widows or widowers, who receive an average of $1,460.55 each month.

Disability insurance comprises about 14.7 percent of all Social Security payments, and the top recipient is disabled workers, who receive an average $1,280.17.

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No More File And Suspend

Note that the claiming strategy called file and suspend, which allowed married couples who have reached their FRA to receive spousal benefits and delayed retirement credits at the same time, ended as of May 1, 2016. However, spouses born before Jan. 2, 1954, who have attained their FRA may still be able to file a restricted application. It allows them to claim spousal benefits while delaying their own benefits up to age 70.

Social Security benefits can be taxable if your combined income is high enough.

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The Maximum Social Security Benefit In : How To Get It

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The maximum Social Security benefit in 2020 is $3,790 per month if retiring at age 70. The max Social Security benefit per month is $3,011 for retirement at age 66 $2,857 for retirement at age 65 and $2,265 for retirement at age 62.

Why Was The Forecast Off

While the latest numbers represent good news, you have to wonder why so many people had to sweat it out in a panic for the past year or so due to a bad forecast.

Yet economists not involved in the process see how things could go wrong.

“Economic forecasting isnt easy in ‘normal’ times, and 2020 was nowhere close to normal,” said Charles L. Ballard, professor of economics at Michigan State University.

The overall drop in economic activity, he said, could have been expected by many to drive down wages.

But it’s possible, Ballard said, that some forecasts underestimated two things.

“First, the stimulus programs boosted demand very substantially,” he said.

“Second, a very large share of the jobs lost in March and April of last year were low-wage jobs. If we drop out a lot of low-wage jobs from the calculation of average wages, then the average wage will go up, even if nothing else is happening,” Ballard said.

The economic fallout didn’t hit all workers evenly in 2020. Many who held lower paying jobs in restaurants, retail and elsewhere lost work. But at the same time, many others were fortunate enough to hold onto higher paying jobs by working remotely from home.

Richard Johnson, director of the Program on Retirement Policy at the Urban Institute, said total wages went up in 2020, while the total number of people who received a salary or wage went down.

“We had pretty strong wage growth for higher income people,” Johnson said.

Also Check: Social Security Number Of Deceased Parent

Whats Full Retirement Age

Full retirement age is when youre eligible to receive full Social Security benefits. Your full retirement age depends on your birth year: Under current law, if you were born in 1951 or later, your full retirement age is now some point after age 65all the way up to age 67 for those born after 1959. If you were born before 1951, youve already reached age 66 and full retirement age.

Retirement ages for full Social Security benefits

If you were born in

Your full retirement age is

1950 or earlier

What Is The Maximum Social Security Benefit At Age 62

7 GOOD REASONS to File for Social Security Benefits at Age 62

The earliest age you can file for Social Security retirement benefits is age 62. For those who file for Social Security in 2020, the maximum they could receive at age 62 is $2,265 per month. Before you get excited, if you had the income history to get the maximum Social Security benefit in 2020, that would represent a significant drop in your income during retirement, assuming you dont have substantial assets to make up the difference.

If you are financially independent and retiring early by choice, claiming Social Security at 62 may make sense. On the other hand, if you find yourself out of work and looking for money to get by, look for alternatives. Give the economy time to recover from the coronavirus pandemic so that you can go back to work. Exhaust all stimulus checks, unemployment, severance, or even unused vacation pay that may be at your disposal.

In case you were wondering if you turn 62 this year, your full retirement age is 66 and 8 months.

What is the Maximum Social Security Benefit at Age 67?

When it comes to Social Security for the year 2020, the full retirement age is 66 and 2 months. For most people reading this, your full retirement age will likely be closer to 67. That being said, the maximum Social Security benefit for someone at full retirement age in 2020 is $3,011 per month.

Want the Maximum Social Security benefit in 2020? Wait until age 70 to claim benefits.

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What Is The Maximum Social Security Benefit At Age 70

The numbers start to be a bit better for those who are patient and wait to claim Social Security later. At age 70, the maximum Social Security benefit is $3,790, per month, in 2020. For those who have a comprehensive retirement plan, that will provide a base income that you cannot outlive. Again, if you have earned the revenue required to get the maximum Social Security benefit at age 70, that will still not be enough for you to maintain your standard of living in retirement.

For the vast majority of Americans, when to take Social Security is a choice they get to make. However, those who wait to receive benefits will no longer have a choice once they reach age 70. Thats because 70 is the latest age at which you can start claiming benefits. Even for those fortunate enough to not need the money, they will be forced to claim Social Security at age 70.

If you are still working, claim Social Security at age 70, and use the money to top off your retirement contributions. That is an excellent problem to have. I bet a few of you are rolling your eyes, but I know quite a few people who are still working, by choice, well into their seventies, and I have a few clients who are still working in their eighties. They are fortunate to have careers they love and the health to keep working.

Related:

How To Get An Estimate Of Your Future Social Security Benefits?

Financial Clawbacks When Taking Social Security Before Full Retirement Age

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When Can I Retire When Can I Take Social Security

Obviously, people want the option to retire as soon as they likethe earliest age generally being 62. But the decision to take Social Security retirement benefits can be complicated by your health, your marital status and your spouses Social Security plan.

One of the key factors is the year you were born, as when you were born will determine your Full Retirement Age For people born between 1943 and 1954, for example, Full Retirement Age is 66. As shown below, the Full Retirement Age creeps up by two months for every year between 1955 and 1960. Everyone born after 1960 currently has a Full Retirement Age of 67.

Full retirement age doesnt tell the full picture. As we will explain in this piece, retirement at each age has benefits and drawbacks.

What Is This Strange Index

9 Facts About Social Security  Beirne Wealth Consulting ...

The average wage index is based on the total amount of wages paid for a year, divided by the number of people with income reported on W-2 forms.

The index — which no one typically talks about is a benchmark that Social Security uses to calculate future benefits for those turning 60, who can claim retirement benefits beginning at age 62. The two-year gap is a normal part of the formula.

“If a person reaches age 62 in 2022, for example, then 2022 is the person’s year of eligibility,” according to the Social Security Administration.

“We always index an individual’s earnings to the average wage level two years prior to the year of first eligibility.”

The formula depends, in part, on the growth of average wages in the economy, according to a the American Center for Progress think tank.

The average wage index, of course, is one piece of the puzzle when it comes to calculating individual benefits. Other factors include: the total number of years you worked, the wages you earn each year, and how old you are when you claim retirement benefits.

Social Security, for example, takes into account how much money you’ve made over the years by calculating your average indexed monthly earnings during your top 35 years of earnings.

Claiming at age 62, the earliest date possible, will mean that you’re getting a far lower monthly payout than if you claim benefits at full retirement age.

Those who turn 62 next year and afterward face another issue, too.

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Claiming Social Security At 62 Here’s The Maximum You Can Receive

    The age at which you file for Social Security benefits will have a major impact on the amount you receive each month. While you can receive larger monthly payments by delaying benefits, many workers choose to file as early as possible at age 62. That can be a smart strategy in many cases, and there are several advantages to claiming early.

    You can still earn a substantial amount in benefits by claiming early, too. In 2022, the maximum you can collect by filing at age 62 is $2,364 per month — which is significantly higher than the $1,557 per month average benefit amount. Here’s what it takes to achieve the maximum monthly payments.

    How Should I Decide When To Take Benefits

    Consider the following factors as you decide when to take Social Security.

    Your cash needs: If youre contemplating early retirement and you have sufficient resources , you can be flexible about when to take Social Security benefits.

    If youll need your Social Security benefits to make ends meet, you may have fewer options. If possible, you may want to consider postponing retirement or work part-time until you reach your full retirement ageor even longer so that you can maximize your benefits.

    Your life expectancy and break-even age: Taking Social Security early reduces your benefits, but youll also receive monthly checks for a longer period of time. On the other hand, taking Social Security later results in fewer checks during your lifetime, but the credit for waiting means each check will be larger.

    At what age will you break even and begin to come out ahead if you delay Social Security? The break-even age depends on the amount of your benefits and the assumptions you use to account for taxes and the opportunity cost of waiting . The SSA has several handy calculators you can use to estimate your own benefits.

    If you think youll beat the average life expectancy, then waiting for a larger monthly check might be a good deal. On the other hand, if youre in poor health or have reason to believe you wont beat the average life expectancy, you might decide to take what you can while you can.

    A quick note about life expectancy

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    Can You Collect Social Security At 62 And Still Work

    Everybody can get Social Security retirement or survivors blessings and paintings on an equal time. But, in case you are more youthful than complete retirement age, and earn greater than positive amounts, your blessings might be reduced. The quantity that your blessings are reduced, however, is not without a doubt lost.

    Are Social Security Benefits Taxable

    ð´Best Age To take Social Security Benefits

    If you have a lot of income from other sources, up to 85% of your Social Security benefits will be considered taxable income. If the combination of your Social Security benefits and other income is below $25,000, your benefits wonât be taxed at all. The amount of your benefits that is subject to taxes is calculated on a sliding scale based on your income. Money that Social Security recipients pay in income taxes on their benefits goes back into funding Social Security and Medicare.

    If your retirement income is high enough that your benefits are taxable, how do you pay those benefits? You can ask Social Security for an IRS Voluntary Withholding Request Form if youâd like the government to withhold taxes from your Social Security benefits. Otherwise, youâre expected to file quarterly tax returns to pay these taxes over the course of the year.

    That covers federal income taxes. What about state income taxes? That depends. In 13 states, your Social Security benefits will be taxed as income, either in whole or in part the remaining states do not tax Social Security income.

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