How to Retire at 62 Without Claiming Social Security
Many people retire in their late 60s for several reasons. First, for workers born in 1960 or later, the full retirement age (FRA) for social security purposes does not come into effect until age 67. And FRA is when older people are allowed to collect their full benefit, without reduction.
But for some people, retiring early is an important goal. And you may decide that you’d rather leave the workforce in your early 60s than wait another five years or so. This way, you will have the opportunity to enjoy your retirement while looking younger and potentially healthier.
In fact, 62 is a fairly common retirement age, as this is when older people are first allowed to register for Social Security, albeit at a reduced rate compared to at the FRA. But if you apply for benefits at age 62 and lock in a lower monthly benefit for life, you could find yourself in financial difficulty throughout your retirement.
As such, it pays to look for ways to retire at age 62 without immediately claiming Social Security. Here are some options that could make this possible.
1. Leverage your savings
If you retire with a healthy nest egg, it may be more than possible to live on the withdrawals you make from your IRA or 401(k) plan. Of course, you’ll need to be careful not to withdraw too aggressively from your savings, as you don’t want to deplete your nest egg prematurely. But if you have enough money set aside, it may be possible to make larger withdrawals for several years so you don’t have to claim Social Security right away, and then lower your withdrawal rate once FRA arrives and you can hang your monthly. fully benefit.
2. Use your home as a source of income
If you have a lot of equity in your home, it can be quite easy to borrow against it. And so you may decide to take out a home equity loan to help pay your living expenses for a few years in the absence of Social Security collection.
Of course, this strategy only works if you are able to borrow at a low enough rate. But if it is possible, then a loan, combined with your savings, could make it possible to wait for Social Security.
Another option to consider is renting out part of your home for a few years and using your rental income to pay your bills. This works especially well if you have a separate area of your home, such as a finished basement, that allows for plenty of privacy.
3. Maintain a part-time job
You may not want to hold down a full-time job at age 62. But if you’re willing to work part-time, it could allow you to delay applying for Social Security and let your benefits increase.
These days, there are plenty of ways to make money in a less traditional sense. You can sell crafts online, become a private chef, or provide pet care outside of your home. It’s worth seeing what options allow you to earn a steady income while maintaining the lifestyle you’re hoping for.
Retiring in your early 60s may be a goal for you, and it’s possible to do so without filing for Social Security right away. Remember that Social Security will pay you a benefit for the rest of your life, and dramatically reducing that benefit with an early claim is a decision that could come back to haunt you later. So it pays to look at ways to retire early, while avoiding touching benefits you might really rely on.