It's for this reason that 65 may be a great age to claim your benefits; it's a nice compromise. Many people assume that they're eligible for their full monthly Social Security benefit at 65 because that's the age at which Medicare kicks in.
But unfortunately or fortunately, depending on how you choose to look at it , you're entitled to those health benefits well before you're eligible to collect your Social Security benefit in full. Still, 65 may be a good age for you to sign up for Social Security, and it really has nothing to do with Medicare. By claiming benefits at 65, you're not filing at the earliest possible age of 62, but you're also not waiting too long to get that money.
It's a smart bet if you have longevity concerns. Social Security is technically designed to pay you the same lifetime not monthly benefit regardless of when you initially file. The logic here is that if you claim benefits early and reduce them, that will be offset by the greater number of individual payments you receive in your lifetime. And if you delay benefits, you'll get more money each month, but fewer individual payments. All told, things should come out about even if you live an average lifespan, but if you're worried you'll pass away sooner than the typical senior, then it generally pays to claim benefits on the early side.
If you settle on 65 as your filing age, you'll be limiting your longevity risk, all the while ensuring that you don't wind up with the maximum reduction in benefits you might face.
Of course, there's one small advantage to claiming Social Security in conjunction with Medicare. If you do, your Part B premiums will be paid from your Social Security benefits directly. Of course, Buffett chose not to retire because he loved his work. Not everyone is lucky enough to have their passions and their career align so perfectly. But early retirement offers the opportunity to pursue endeavors you love.
Whether they're profitable or not is no longer the point once you have the financial security to support your lifestyle. You can get around to writing that book you didn't have time for when you were working 40 hours a week. You can start brewing beer in your basement and open a nice little speakeasy for your friends to enjoy a lager or a cocktail with you tips only! You can fix up run-down houses and rent them out or sell them for a profit. Or you can volunteer your time to help causes you'd otherwise support with monetary donations.
Not only does working on things you love provide the potential for monetary rewards, but it could help you live longer. There's no rule, however, that "work" has to be a traditional job. If this is you, perhaps you might want to try a sabbatical instead of an early retirement. The earliest you can start Social Security benefits is age However, just because you can start benefits does not mean that you should. Your monthly Social Security paycheck increases significantly for every month and year you delay starting, up until your full retirement age around age So, if you are planning on an early retirement, it is best to do so without starting Social Security.
Living more frugally is not a necessity in retirement, but if you think that you can simplify your spending, then you can probably retire at 62 or earlier if you really want to. When you retire, you have the opportunity to prioritize what is important to you and let the rest slip away.
Prioritization can help you reduce your spending levels. And, this can be incredibly freeing. If not, you might want to wait a bit longer to retire. Here are a few ideas for how to afford healthcare before Medicare eligibility. So go out there and enjoy it. Disclaimer: The content, calculators, and tools on NewRetirement. Javascript must be enabled to use this site.
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