I will be turning 62 next year and would like to begin
collecting early Social Security benefits. Am I
penalized once I turn full retirement age of 66 for the
amount I would receive then? Or does it revert to the
amount on my Social Security yearly statement?
Generally, if you choose to begin receiving Social
Security benefits before your full retirement age, yes,
you will permanently reduce your monthly benefit. The
reductions are designed to make your benefits
actuarially equal no matter when you start them if you
live to average life expectancy, though this can be
complicated by issues including inflation adjustments
and tax rates.
people born between 1943 and 1954, full retirement age
is 66 exactly. If you begin collecting at 62, your
primary amount will be reduced by 25 percent. So if your
full retirement age benefit is $1,000 per month, it
would be permanently reduced to $750 (plus cost of
living adjustments) at age 62.
another "give up" when claiming benefits
early: You can earn delayed retirement credits by
delaying claiming after full retirement age up until age
70. For those boomers born between 1943 and 1954, like
you, thatís a full four years of delayed benefits,
increasing at 8 percent per year, for a total boost of
32 percent above the original primary insurance amount
of $1,000, to $1,320. Thatís a whopping 76 percent
increase from the benefit amount if claimed at age 62.
and survivor benefits are also reduced by an early
claim. Of course, if you are in ill health and arenít
trying to protect income for a spouse or you have no
other retirement income sources, delaying benefits
probably isnít a realistic option.
are free and paid services online that will help you
figure out your best claiming strategy. Among them: AARP
Bedrock Capital Management (www.bedrockcapital.com) and
Social Security Solutions (www.socialsecuritysolutions.com).
Thanks for the article on reverse mortgages. This case
fits us. My wife was not 62 when we took out the reverse
mortgage. I had contacted my lender and they did not
know anything about this. Would you know the house bill
number so I can refer them to it?
It wasnít congressional legislation, but new federal
guidelines that expand options for certain nonborrowing
spouses to remain in their homes when a spouse named on
the reverse mortgage dies. Search online for
"reverse mortgage mortgagee letter" for more
What happens with a reverse mortgage when you live long
enough to use up the money you have in equity? There is
still a mortgage. Who pays that? Is that added to the
bill I owe or am I once again responsible for paying the
mortgage? Is the mortgage still paid up to the value of
the house? What if I live long enough that there is no
longer any money left to pay back the loan?
As long as at least one of the borrowers on a federally
insured reverse mortgage continues living in the house,
there is no loan repayment required, though housing
officials stress that borrowers are obliged to keep
paying property taxes and maintaining the home. When the
last borrower moves, sells the house or dies, his or her
estate is responsible for repaying the loan. (This can
be delayed up to a year in cases when a borrower goes to
a nursing home. There are other special provisions, as
stated above, for qualifying nonborrowing spouses.) If
the home is sold for more than the loan amount, heirs
can keep the difference. If it sells for less, heirs donít
have to pay the difference and the loss is passed along
by the lender and absorbed by the federal government.