Social Security at 62

[AlanM919884]

I see a lot of comments that you should wait until 67 to take you SS as it increases by 7.5% per year.  But if my sole income is IRAs (including a lump sum pension),  I think it would be better to take SS early.  Here is my logic:

Social Security income will be taxed at 85% of the Fed tax rate, which would be about 9.86% (based on 11.66% fed tax rate and no state tax)

The same money withdrawn from our IRAs would be taxed at apprx 16.38% (11.66% Fed and 4.72% state)

Social Security will increase approx 7.5% each year we delay taking it.   

But the same amount of money that we don't withdraw from IRA would save 6.52% in taxes (16.38-9.86). Plus that money "could" grow in the market 4% to 6%.

Seems like a no brainer right ?

Thanks

[fishdoggy1]

I waited till 65 but retired at 62, lived out of savings for 3 years. The biggest reason for not taking it was my wife with no 10 year work credit was not going to get half of my reduced amount, she was only getting 40% of my reduced SS because she was the same age as me. At 65 she was at 48% of mine and with hardly any SS put into the system she was way ahead after 2 months. Between what I had put in and my employers the feds needed to pay me back $230,000, that is not computing anything else, just wanted to start and not have to send a check for both of our Medicare premiums. You may not be figuring the tax correct based on the standard deduction coming off before the calculation for the 85%. Wish I had more than a $112 pension and SS.

[GailL1]

BEFORE Full Retirement Age, your benefit doesn’t grow at a set % - at that time it is based on the regular SS formula and the increases are only reflected by the Average Wage Index.  

SSA.gov - Average Wage Index

AFTER full retirement age up to 70 years old, your benefit grows about 8% a year for delayed retirement credits.

SSA,gov - Delayed Retirement Credits

Taxation of benefits, if any, is based on the amount of your other income + a % of your benefit - 

SSA.gov - Taxation of Benefits

Now everybody can make the decision as to when they want to begin their SS Retirement benefits but just remember there is a reduction of your benefits for early taking at 62 AND  if you are gonna keep working and earning an income from a job - then your benefits are even further reduced until your reach that FRA based on the amount of earned income that you make.

SSA.gov - How Work Affects Your Benefit

Just make sure you understand how it will work for you and your situation before triggering that early retirement at 62.