Why retire and collect social security at 62?

good morning today we're going to talk about social security a lot of the people are struggling with when should i retire if i retire at age 62 that is the minimum age at which you could retire unless you're disabled or you have disability they say i'm going to receive less money compared to when i retire at full retirement age now your full retirement age is going to depend on when you were born when you were born will determine what is considered full retirement age for you and of course the maximum is 70. i'll try to keep it simple so stay with me and lose [Music] my suggestion if i were you the first thing you should do is to contact the social security office or make an appointment or go in there with the social security administration and ask them what really applies to you how much will i receive at age 62 let's say you already passed age 62 i'm 865 now how much will i receive if i retire now compared to if i wait until my full retirement age compared to let's say 67 for you let's say that's the full retirement age or 70 years old what will be my benefit those are only the three things that you will need to get from them then you go home and you start analyzing your situation but i'm going to put it in a nutshell what are the things that you should think about before you decide to retire obviously if you're weak you have no choice but to retire it's a no-brainer you have to retire but you have options i can retire now i can retire later then these are things that you will need to consider let's take a look at it why should you retire at age 62 for many people about i think 40 percent of retirees retire at age 62 but again that is the minimum age at which you can retire the amount of check is less but the amount you receive in total dollars could be born now how will you be able to recover that that's the so-called break-even point which we will be talking about in greater detail you may not leave past the break-even age consider your lifespan and compare it to when you would break even meaning when you will receive more by filing later so if you file later you can receive more but meanwhile you have foregone collecting during earlier years no other income now or in the future well if you're still working and money is good why will you retire so continue doing it unless you feel i've had it it's time for me to enjoy life to enjoy retirement you're going to be one of the blessed ones if that is your situation spouse can claim spousal benefit which is fifty percent of the benefit you receive a non-working spouse can receive up to fifty percent of your working spouse's benefits so if your working spouse receives two thousand you will receive one thousand so you between the two of you you will get in three thousand dollars now if both of you are working you will receive you will collect on your own benefit and your spouse will collect on their own benefit and when one of you dies the surviving spouse or whoever has the higher benefit will receive will be received by the surviving spouse your benefit is higher than your spouse's benefit you will just receive your benefit if your spouse's benefit is higher than yours and he dies you will receive your spouse's benefit and by the way speaking about spousal benefit you cannot claim a spousal benefit the spousal benefit is basically for people who never work the spouse never work and is relying on the other spouses or the working spouse's benefit she or he the unworking spouse cannot collect disposal benefit until his spouse or her spouse files a claim so until he files a claim there's no spousal benefit you will have access spending cash by filing early or you simply just don't need the money okay if if your money is not adequate and you're frustrated you're desperate you you need to get more money well that's a way to file early that's a reason to file early and of course lastly we are going to talk about well just how do you compute the break-even age and this will help you understand what i'm talking about when i talk about breakeven so let's uh take a look at it and see how you determine this and by the way there will be a copy of this spreadsheet that i'm going to show here available for you just by the question down below okay down below uh look at the comment section or above the comment section uh that there is a link and you could request for it okay and i will email it to you and in addition to that you will also be emailed the social security administration manual that's pretty extensive and you will get all the information that you need to make your own determination so now let's take a look at the computation of break-even age this is i prepared this spreadsheet to make it easy for you but uh really you don't need a spreadsheet it will be easy for you to calculate this if you have a little bit of skill in math so first thing is look at the aids retirement here if you're going to retire at 65 obviously you cannot retire earlier than 62. so i have here 62 67 is my assume retirement full retirement aides for you okay uh that's called fra fools retirement age let's say 62 and 70 you're getting a bonus for retiring later than the fool's retirement age but let's say that you're retiring at 65 so obviously you change that to 65 and your next break even is 65 then to 67 then to 70 okay uh how do you determine this you have to talk i mean to talk to the social security administration office to get all these benefit amounts what will the benefit amounts be at these break points so let's assume 62 and you can see here i said after age 61 because you cannot file anything before your 62. now in this case i got this published numbers from the internet this is not exactly yours because the benefit you will receive depends on number one your age number two the number of credits you have and the amount of income that you paid in to social security so each one is going to be different now 1426 if you retire at age 62 let's say if you wait until 67 you will get 2061 if you wait until age 70 you will get 2561 meaning by waiting what is this five years by waiting five years you will get 635 dollars more per month and by waiting another three years from 67 to uh 70 you you will get 1135 again this is these numbers here is in comparison to the base at age 62. so you can see that that's very enticing it's almost double look if if you retire at age 62 1004 at age 70 you'll get 1 000 one more not quite twice but big amount big amount that's very enticing but why i say wait until you age 62 and then go for it again depending on your situation your situation may be different in which case the decision is no no you have to wait this is how you determine that at age 67 you will receive 500 635 more right 2061 instead of 1426. the problem is this when you wait until your age 67 you could have gotten the money the money how much how much money is going to be 1426 from age 62 to 67 or five years five years of mullah that you have forgotten so you take one thousand four twenty six times twelve that's every year times five years this is the amount of money that's a big amount eighty-five thousand dollars and look if you wait until age seventy it's going to be one thousand four twenty six times 7 years times 12 and that's going to be i'm sorry that's 7 years at 8 years times 12 that means you will receive 136 000 dollars a lot of money but but by waiting until your age 67 you will receive 635 more so you say to yourself okay i could have received 85 but i did not but i will be receiving 635 more a month so you divide 85 000 by 635 and you say you would have recovered this money that you lost in 135 months for the installment 135 divided by 12 that's so many years you will have to wait for you to recover that money and then add that to this age okay at age 67 is when you stop at those number of years and it will say you will be 78 years old in summary in summary i'm saying if you waited until age 67 to collect the money you lost 85 000 but you will get 635 more that means divided dividing one into the other in 135 months you would have recovered the amount of money you lost and that is equivalent to you being at age 78 so you'll be titled 67 by age 78 you're good if you die before 78 you lost money if you survive beyond 78 you made money same doing the same calculation here 121 months divided by 12 add that to the 70 70 age you'll be age 80. so by waiting at age 67 you will need to survive until age 78 by waiting until age 70 you will need to survive until your age 80 then you will break even okay you will break even and you say oh well am i going to am i going to survive at age 78 or age 80 or am i going to be dead for example when in my particular case when i decided to collect now at age let's say 62 i can remember yeah at age 62 i would break even when i'm 78 my dad passed away when he was 77 and i said to myself with the medicine today i will probably surpass that however with all the issues i have high blood pressure diabetes and all that what's the chance i'll be gone before i'm age 78. so i had to take a gamble and i decided to go at age 62. why is that it's not all money i want to rest i want to enjoy life i'm not going to continue working and working and then later after one or two years pass away it doesn't make sense so i said even if i lose money at least i had the enjoyment of being retired early so that's another non-financial factor now i'm going to throw one more thing here if you're receiving your social security because you needed the money that means you get the money and you spend you spend you pay the bills all that this is a good analysis 78 and 80 will be a good break-even point right but suppose you have pension other pension coming into you and you don't really need social security social security is different from other pensions you may be receiving you may have other business too and is it worth 6 35 and 11 35 and forgot the other ones because you could receive this eighty five thousand dollars or a hundred thirty six thousand dollars and invest it as you receive it you throw it in investment okay let's say you're you have stocks mutual funds real estate investment you will have certain returns so the money you receive now is worth more than the money you receive later okay now what is that and this you have to really think about if you are in that situation another thing is you may not be investing but maybe you can pay off that let's say you still have home mortgage okay if you continue to pay your home mortgage maybe your interest rate is four percent two percent whatever or credit card debt interest rate could be like 14 hopefully not hopefully not hopefully all your credit card debts are paid off because you're preparing for retirement but you have to look at that and say money should be worth to me now than receiving it later see the top part here because i'm saying here it's zero return to me because when i receive it i spend it when i receive it i spend it i have nothing to spend uh i mean to invest my money on and i don't have credit card debt or home mortgage because in the case of credit card debt and home mortgage now it's not a return however it's going to be saving the interest that you're paying on those so let's say you have a whole mortgage that you're paying at four percent interest and you can actually prepay those of course without penalty and save yourself the four percent so that money you receive now is worth four percent more so let's assume that to be four percent look at the break-even point now from 78 it jumped up to 84. okay and compared to 70 from 80 it jumped up to 86 you'll have to be age 86 for you to break even now a home mortgage is a good example if you could receive this social security and pay pay off the extra money that you have received on social security let's go consider that extra money because you have other income let's say but i could pay that off that's that money is worth four percent to me so if you use that four percent you will break even at age 84 and age 86 and then you say to yourself gee am i going to survive that long or not that's the beauty of the time value of money this is i i watch a lot of uh shows on youtube and they're not factoring this and i'm saying to myself no that should be factored in and the reason is for most people they don't invest houses paid off things like that so to them money today is worth money tomorrow so no difference which means the first the one on top is a good enough analysis but for those for example if you have that social security money is extra money and you can invest it in stocks and you get six percent 93 and 95 is the break-even point between 67 and 70. not too many people will survive that long i know some people survive at age 100 even beyond but 93 and 95 so it will not make sense so again it depends on whether or not you can use that money to invest or pay off existing debt for which you are spending or paying interest on all right so this is uh this is the spreadsheet i'm willing to share with you uh just go down below in the information section and click the link and request for it and you will receive in addition to this model a copy of social security administration publication regarding uh regarding social security benefits in general also the retirement ages depending on your date of birth and you should luck in planning your retirement but like what i said best thing for you to do is to go to the social security administration and go get those few numbers and for this analysis you only need the percentage here if again if you don't have any investment opportunity you just turn that to zero and then the amount of money you will receive at whatever retirement age compared to 67 and 70 and get that information from the social security administration office and you're all set you should be able to make a decision in addition to this just the financial financial aspect of retirement in addition to other non-financial factors that you will need to consider want to relax now want to enjoy life now i need money now because i'm short of money that will sometimes define exactly what you need to do with no fertile analysis thank you very much for watching and please do share this with others and i will appreciate it if you click like and do subscribe to my channel unless you have already done so make it a great day and godbless

Channel: Vlogger Grandpa

Views: 649,520

Keywords: philippine retirement and travels, vlogger grandpa, my free catechism, social security, retirement planning, filing for social security, financial planning, full retirement age, working and social security, social security retirement benefits, social security full retirement age, retire early, how to retire early, early retirement, social security at 62, whats the best age to claim social security, social security collect now or later, social security when to collect

Id: ARZ9iR1DEM0

Length: 20min 18sec (1218 seconds)

Published: Tue Jun 08 2021