Within the United States pension system, citizens can choose from several options. Retirement at age 62 is possible, as this is the minimum age for claiming Social Security. However, it may not be the best option to consider. There are other ages at which we can apply for retirement.
Applying for Early Retirement Age has a clear disadvantage with respect to the rest of the modalities in retirement. However, it also has its positive side. However, even though it has a positive side, the senior should keep in mind that applying for Early Retirement Age can be a bad idea for several reasons.
The first of these reasons is financial, and that is that we will lose a lot of money if we apply for Social Security retirement benefits at age 62. With this in mind, we can also add other negative reasons why applying for early retirement is a bad idea. Let’s look at the exact reasons and possible solutions.
Why is it a bad idea to apply for Early Retirement Age?
The Social Security benefit depends on three key elements. These three elements are the salary as a worker, the years worked and the retirement age. Considering that the last of these factors cannot be changed, you need to know what to do with the other two.
Retirement age at 62 implies losing 30% of the benefit check. This implies that if we have a pension of $1,000 per month, we will end up receiving only $800 per month. And that’s not counting taxes and all the other monthly payments we have.
So that is the main reason why we should not apply for Early Retirement Age. However, many people may think about applying for this type of retirement because it is more convenient. We can look for a way to apply for Early Retirement without going broke financially.
How to apply for Social Security at age 62 without losing money?
In order to reach Early Retirement Age and have enough Social Security money every month, what we must do is save. When we are working, we should save as much as possible. That is the key to making sure that the Social Security check is enough every month.
In addition to that, a good retirement plan is also critical. We have the options of 401(k) or Ira Roth, which can make us have a large amount of money during retirement.
To all this we have to add something that is also very important. By not being able to use Medicare until age 65, we will have to pay all the medical expenses even if we only have the benefit as a source of income. Therefore, as soon as we have the opportunity, we should enroll in Medicare and start using all the services it offers.