Grad Profile Leaderboard

Social Security Matters

by | Dec 26, 2024 | Opinion

Ask Rusty – Have I saved social security money by claiming at 62?

Dear Rusty: I had to start collecting Social Security at 62, and I am 75 now. I believe that in the last 13 years I have saved Social Security money, so I do not know why I cannot draw my full benefits now.  

 If I had started drawing at 65 at $1,200 per month, then I would have drawn $16,400 per year. Instead, I got $680 per month from 62 to 75, or $8,160 per year, or about $106,000 over 13 years. Compare that to the age 65 amount of $14,400 per year for 10 years, which is $144,000. So, by claiming at 62, at age 75 I have saved the government over $38,000. It would make seniors lives so much easier if they could draw full Social Security at 75 years old, after getting only part of their SS. Signed: Second-guessing  

 Dear Second-guessing: The difference between benefits claimed at various ages causes many to reflect, as you have done, about what might have been had you waited longer to claim. But there is an error in your calculations. If your age 62 monthly benefit is $680, your age 65 monthly benefit would have been about $845, not $1,200. Thus, at 75 you would have collected about $101,400 by claiming at 65, vs. the $106,000 you have received by claiming at age 62. In other words, you still would not have broken even had you claimed at age 65.  

 Social Security says that it doesn’t matter when you claim – they say that if you claim early your payments will be less, but you’ll get more of them. Where SSA’s argument falls apart is when life expectancy is longer. Our experience is that if you wait until your full retirement age (FRA) to claim (which is age 66 in your case), vs. claiming at age 62, you will collect the same amount of total money at about age 78. In other words, the “breakeven age” for waiting until FRA to claim is about 78. So, you will reach your personal “breakeven age” in about 2 ½ years (at age 78). And this is precisely why we encourage everyone to understand their life expectancy when deciding when to claim Social Security – those who expect to live longer will, indeed, get more SS money if they delay claiming.  

 Your benefit is determined by your age when you claim, and if you claim before your FRA your monthly amount is permanently reduced. If you claimed at age 62 and your monthly amount was $680, then in the four years until you reached age 66 (your FRA) you would have received about $32,640. If you had, instead, waited until your FRA to claim, your benefit at age 66 would have been about $906/month. Collecting $906/month (at 66) vs. $680/month (at 62) would make your breakeven age about 78. If you claimed at age 65 instead of 62, your breakeven age would have been about a year earlier (77). 

 So, have you saved Social Security money? Up to this point, you have not. Since you claimed at age 62, you have collected about $680/month for 13 years until you were 75 (or about $106,000). If you had waited until age 65 to claim you would have, instead, collected about $101,400 – in other words you have received more, so far, by claiming at age 62. But that will change when you reach 77 (your breakeven age, had you claimed at 65). Starting at age 77, you will have received less in cumulative lifetime benefits because you claimed at age 62. Which, again, is why – at the AMAC Foundation’s Social Security Advisory Service – we encourage everyone to consider life expectancy when deciding when to take Social Security. Of course there are other factors too, not the least of which is financial need, but life expectancy is key. And since the benefit you get when you claim is permanent (except for annual Cost of Living Adjustments), deciding when to claim Social Security is a decision which affects a lifetime. 

This article is intended for information purposes only and does not represent legal or financial guidance. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at [email protected].

Enjoying this column? Want to read more like this in the new year? Support your local community newspaper by subscribing to The Farmersville Times today!

Grad Profile Leaderboard

0 Comments

Grad Profile Leaderboard

Related News

The perks of good coffee

The perks of good coffee

Columnist John Moore noticed a tear on his coffee cup and himself after a recent purchase at a high-dollar coffee shop. Courtesy John Moore  On a recent trip, I remembered why I like to stay home.  Coffee. After throwing back the covers from my rented room,...

read more
A hare much

A hare much

Columnist John Moore recalls the friends of his youth, including Harvey The Rabbit. Courtesy John Moore I never had more than one at a time, but I had stuffed animals.  Don’t all kids have a security blanket when they’re young? At first, I had a monkey who had a...

read more
President and accounted for

President and accounted for

Most of us can cite a handful of times when we knew that we were witnessing history.  Something unique. Something profound. A shift in the tectonic plates of society. So it was on January 20, 2025. There was a drawing for tickets to attend the presidential...

read more
Someone’s watching

Someone’s watching

While some in society have stopped wearing watches, columnist John Moore isn’t one of them. Courtesy John Moore  I noticed his Watch immediately. I usually notice watches immediately. But his was especially noticeable. It was a Rolex. I don’t own a Rolex, but one...

read more
Wild times picking blackberries

Wild times picking blackberries

Wild blackberries. Photo by Siala from Pixabay My father would load my sister and me into his ‘52 Chevy truck, and he’d steer down the gravel road leading to the homestead where my mom was raised. The radio played Loretta Lynn and Faron Young as the wind...

read more
Dream on

Dream on

I’m fairly certain my dreams have a drug dealer. What is it with dreams? Sleep is supposed to be an 8-hour window (mine’s never that long) when we rest, regenerate, and arise feeling as refreshed as the person in the Folger’s commercial who throws back the covers and...

read more
Dream On

Dream On

I’m fairly certain my dreams have a drug dealer. What is it with dreams? Sleep is supposed to be an 8-hour window (mine’s never that long) when we rest, regenerate, and arise feeling as refreshed as the person in the Folger’s commercial who throws back the covers and...

read more
What was in store

What was in store

John Moore continues to shop at mom and pop stores for may reasons stating where else do you get a free calendar every year? Courtesy John Moore When Wal Mart grew, warnings that it would put the mom-and-pop businesses under seemed to come true. Now, online businesses...

read more
A lot of class

A lot of class

In the movie “The Big Chill,” a group of old friends gather for the funeral of one of their own, and it turns into a reunion. Recently, a group of my old friends gathered for a reunion, and it turned into a gathering for a funeral. I got the call on the way to the...

read more
Picturing Grace

Picturing Grace

Print from John Moore’s personal collection. When I was a child, there was a painting that hung on my grandmother’s kitchen wall. It portrayed a man who was praying over a meal of bread and what appeared to be a bowl of soup. Near the man was a book, which I always...

read more
Subscribe 300x250 - Love