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

in this video i'm going to show you when it might make sense to file early maybe even as early as 62 for your social security benefits and the break-even analysis chart behind me is just a small factor in the overall decision-making process coming up next on holy schmidt holy schmidt now let's talk about the social security break-even analysis you see on the board behind me let me start by saying that this is not a good way to determine when you should file the fact of the matter is it used to be the gospel for filing and it was even on the social security website you would just go on there plug in a few variables and you'd have a recommendation the social security administration has since taken that down because they know that it's not just about maxing out your total income because there are a lot of issues around your life your obligations etc that come into play that can't be captured on a chart like this so let's talk about what we have here we have three different lines you have a line for the cash flow if you file for social security at age 62 one if you file for social security at age 67 and one if you file for social security at age 70. these numbers come right from the calculator on the social security website and at age 62 if you make sixty thousand dollars a year that's your last income you'll receive approximately eleven hundred and eighty dollars per month as a single individual that's times 192 months if you assume the average person passes away at 78 which is what this chart does that's the green line up and down eleven hundred and eighty dollars a month will be paid out for 192 months this comes to a total of two hundred and twenty six thousand five hundred and sixty dollars from the age of retirement to age 78 if you wait until you're 67 changing nothing else but the age the payment goes up to 789 dollars per month and the time that you get paid goes down to 132 months that gives you an outcome of 236 thousand 148 dollars and if you waited until after full retirement age seventy your payment goes up to twenty three hundred and twenty dollars per month for ninety six months for a total of two hundred and twenty two thousand seven hundred and seventy dollars so what does this mean well line number one is the line for age 62 and at 76 and a half you actually lose money on this decision so if you were to live longer than 76 and a half if you filed at 62 then you are losing approximately six hundred dollars per month every month from that point forward if you look at the blue line that's age 67 you're receiving 1789 dollars per month for 132 months at age 78 that's a total of 236 148 and you're still coming out financially ahead of filing late until 81 and a half years old at 81.5 years old you would have been better off filing when you were 70 and getting the full 2 320 a month again that's approximately 500 550 dollars more from age 81 and a half onward now this is really important the break-even analysis chart is a useful chart to begin the discussion but it's not a good one to make your final decision because there are so many variables that go into deciding when to file for social security and that is what's coming up next we're now going to go to the computer and we're going to go through a presentation and i'm going to talk you through a lot of different points that you need to consider before making that final decision okay here we are at the computer and i'm going to talk about good reasons to take social security benefits before full retirement age first let's talk about the percentage of filers that file my age and gender before at and after full retirement what you see from the chart here is that there is a full two-thirds of the filers that file before full retirement age of here we're assuming 67 that may vary a bit by your personal age but let's assume somewhere between 66 and 67 two-thirds of the population is filing early i'll tell you for the majority of the people that did this that is the wrong decision but there are certain times where filing early might make some sense now let's discuss the three levers that you need to think about when you make a decision on when to file early the first is the yellow area that's the breakeven calculation that we discussed earlier the second is your individual situation we'll talk a lot about that here in this presentation and the third is unlocking other benefits that rely on the filer to unlock their own quick fact check filing early equals smaller checks but more of them americans can expect to live a life span of around 78.6 years frankly i think that's a little low but that's what the tables tell me so we're going to use that for this discussion and finally break even happens at about 76 plus or minus if you choose to file as soon as possible versus filing when you are at full retirement age all right let's discuss the possible good reasons to take benefits early first filing unlocks another family member's benefits number one equals the spousal benefit your spouse can't file on your social security i.e get 50 of what you have until you file next is that the filer does not expect to live to break even unfortunately in this day and age medical science has gotten pretty good at determining how much time you have left and if your mortality is in question it actually might be a good reason to file early third is low or no provisional income now versus later provisional income is simply tax on your social security based on the amount of earned income or other income that falls into the adjusted gross income line that you may receive if you expect to get higher provisional income later maybe you have a variable annuity that kicks in or maybe you expect a business that you own now to take off in the next few years the tax on that might be a very good reason for you to file now versus later next you'll adopt a higher spousal benefit when your partner files again you get fifty percent of your spouse's amount in most cases so if their fifty percent is higher than your hundred percent then it makes perfect sense to file as soon as you possibly can next is one we don't really wanna think about but your partner who earns more than you their life expectancy is short and you will adopt their higher survivor benefits when your partner passes if this is the case and you are reasonably confident that this is going to happen sooner rather than later it might make sense to file for your benefits as soon as possible because frankly you're going to adopt theirs when they do pass the next one is one that i actually think is probably the best of all in your younger years of retirement you have energy you have youth and you have great cognitive ability so it might make sense to have the extra cash early so that you can travel you can spend time doing the things that you love to do that you might not be able to do later on in life and finally the last good reason might be that you just need the money life has been difficult there are bills to pay you have to support other people there's a list of hundreds of reasons i'm sure but the bottom line is if you just need the money i think it's perfectly acceptable to consider filing early a few final points social security is a complicated subject because of all of the variables that come into play when you make a decision on whether you should file early whether you should file a full retirement or even file late so make sure you do a lot of work before you make that decision and if possible you should seek the help of a competent professional now the truth is there aren't a lot of experts on social security because there isn't a licensing for social security like there is for other parts of the financial advice world so you'll have to rely on a lot of your own research some good questions i've listed some down in the description below and most importantly doing what's right for you if you want to learn more on the subject of whether you should follow early or file late check out this video right here this is jeff schmidt thanks for watching

Channel: Holy Schmidt!

Views: 3,269,175

Keywords: best age to file for social security, social security stimulus check, social security explained, social security, retirement planning at 60, social security benefits, social security income, filing for social security, social security spousal benefits, social security at 62, social security benefits 2020, social security benefits tax calculation, social security benefits for spouse, social security benefits at age 62, social security benefits at 62

Id: eOJnzLuyvIY

Length: 9min 4sec (544 seconds)

Published: Tue Oct 06 2020