Thousands and thousands of United States citizens apply each year for Social Security’s Early Retirement Age benefit. Doing so means losing a portion of the money we have contributed in our time as workers. Each citizen loses a different amount of Social Security, as it depends on each individual situation.
The minimum age to apply for a monthly Social Security check is 62. This is called Early Retirement Age and it makes the money we receive each month change a lot. For example, reaching the Social Security maximum of $4,555 per month is impossible if we apply for the benefit at age 62. But it is still possible to get a good payment every month.
It is not mandatory to apply for retirement at age 70 to have a good check. But if we want to have a good Social Security when we apply for retirement at age 62 we should know that we have to lose part of our money. That money we won’t be able to get back, since the monthly amount of the check will be set at the time we apply for the benefit.
How much you lose if you apply for Social Security at age 62?
The first thing we must be clear about is that retirement age is only one of the three points to be taken into account for the amount of the check. So while it is true that we can’t maximize the check on this part, we can on the other two fronts.
Even so, we must bear in mind that if we want to retire at 62, we will lose 30% of our benefit. This means that if we have made a Social Security contribution of $3,000, the final payment will be $2,100 per month. The difference is remarkable and can mean a huge budget change for thousands of citizens.
Therefore, we must try to maximize the other two elements if we want to have the best possible check. This way we are going to be able to reach a good Social Security, even if it is at 62 years of age and we lose 30% of the money we have contributed.
Maximizing the retirement check
In order to be able to increase this Social Security retirement check there are two elements that we must maximize. While it is true that there are three fundamental elements to have a good benefit, the retirement age element we do not take into account. We must keep in mind that if we retire at age 62, the money contributed will have a 30% reduction. So we have to increase these two requirements:
Years worked
Every year worked is important in Social Security planning. We must work a minimum of 35 years if we want to have a good benefit. Working below that number means losing money as well.
Each year worked under 35 years means adding $0 to the average amount of money contributed. Thus, the check can see a huge reduction if we do not take this into account.
Salary as a worker
The other indispensable element is the salary as a worker. In this case we must have the highest salary possible within our possibilities. At the end of the day, the Social Security check depends on the taxes we have paid as a worker.
Therefore, the more taxes paid, the higher the Social Security benefit. Thanks to this, we will be able to get a good benefit even if we apply for retirement at the age of 62.