Dear Rusty: I turn 62 next year, and I am getting different answers to my questions so I hope you can help me. The amount I would collect is different at 67 and 72. If I start to collect Social Security at 62, when I turn 67 will it go up to that amount? And go up again when I turn 72? One person I spoke to said yes it does. The next person I spoke to said no - you get the amount for the age that you start to collect and that’s all you get for the rest of your life. Please help me to understand if I should start to collect at 62 or should I wait? Signed: Confused About When to Claim
Dear Confused: First of all, your Social Security benefit stops growing when you turn 70, so waiting beyond that to claim will only cause you to lose benefits you are entitled to. Essentially you have an 8 year window to claim your Social Security benefits, and the amount you get will be based on the age you claim, relative to your full retirement age (FRA). Your personal FRA is 67, and if you claim at age 62, you’ll get 70% of what you would get at your FRA. That reduction is permanent except for Cost of Living Adjustments (COLA) which may occur annually. Whenever you claim, that is the amount you’ll get for the rest of your life - it doesn’t go up at age 67, or any other later age. But the question of whether you should claim at age 62 or wait longer is more complicated.
If you are still working, you should be aware that claiming at any time before age 67 will mean Social Security’s “earning test” will apply. The earnings test sets a limit for how much you can earn from working before SS takes away some of your benefits. For 2021, the earnings limit is $18,960 (it changes annually) and if that is exceeded SS will take away benefits equal to $1 for every $2 you are over the limit (we don’t yet know what the 2022 limit will be, but it will be slightly more than the 2021 limit). The earnings limit applies until you reach your full retirement age, after which there is no longer a limit to how much you can earn. If you exceed the earnings ...
