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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15205
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have a finance question. I can retire at the age of 62

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I would like Eric, a finance manager to answer this if at all possible.


I have a finance question. I can retire at the age of 62 with a lesser benefit than if I waited until 65. My wife is a retired school teacher in Texas and because of this she will not receive my social security benefits at my passing like most widows. So by retiring at 62 and working part time I can almost make what I would otherwise be making if I worked full time. It seems feasible to me, given my wife won't receive benefits, that I take advantage of the early retirement and enjoy life. At the age of 65 I would already have drawn $75,000 from social security. The difference in my salary in waiting until I'm 65 to retire just doesn't make sense. Am I wrong or does anyone think this is feasible? I also have a pension and 401K. Thanks for your input.

Submitted: 11 months ago.
Category: Finance
Expert:  Lindie-mod replied 11 months ago.

Hello,

I'm Lindie, and I’m a moderator for this topic. I sent your requested professional a message to follow up with you here, when they are back online.

Please keep in mind that Eric hasn't been online in a couple of weeks, do you still want to wait for him?

If I can help further, please let me know. Thank you for your continued patience.

Best,

Lindie

Customer: replied 11 months ago.

If someone with finance and social security experience can help that is fine. I need more than a yes do it or no don't. I need more insight for this huge step in my life.


Thanks

Expert:  Rachel-Mod replied 11 months ago.
Hello,

Thank you, XXXXX XXXXX continue to look for a professional to assist you. Please let me know if I can be of any further assistance while you wait.

Best, 

Rachel
Expert:  Megan C replied 11 months ago.

Thank you for your question. My name is XXXXX XXXXX I will be happy to help you.

The important thing is to do what makes sense to you. What you need to look at is your life expectancy as that will drive the answer to whether or not you should draw early. What you need to do is calculate how long it would take you to recoup that $75,000 once you reach full retirement age.

How do you do that?

Take your full retirement age benefit and subtract your reduced retirement benefit. That is the increase in your benefits by waiting until full retirement age to draw,.

Then, take the amount that you would have drawn from 62 to full retirement age (which is actually 66) and divide it by the increase in your benefits. This will tell you, in months, how long it will take for you to "break even" by getting the same dollar value of benefits from drawing early, to waiting.

Say it takes 10 years to "break even" - if you are in good health and are expected to live 15 years, then it would make sense to wait, because over your life you would draw more benefits.

I hope this all makes sense. You also need to weigh in on the quality of life. If you can have a good life, be comfortable, draw early and work part time...then, by all means do that. You're really lucky that you have options.

 

Enjoy your retirement!

Hope this helps. Please let me know if you need anything additional. If not, please rate as positive so that I can receive credit for assisting you today.

Customer: replied 11 months ago.

Thank you so much for the info. I would have to work 20.5 years for a break even point if I understood your formula correctly. It makes NO sense at all to continue to work full time when I can draw early social security and work part time. I think the cap is $18,000.00, so if I do not go over that amount I will essentially be working part time and receiving full time pay. I also have a pension, investments and 401K that I can draw from if necessary. Yes I am fortunate. Not blessed with a lot of money but a wife with terrific management skills. If I worried about the what if's in life, I would feel I could never quit work and probably kill over dead without enjoying life at all! Excellent advice! again thanks!

Expert:  Megan C replied 11 months ago.
You're welcome. I'm glad I could help you with this. You can work and earn $15,120 per year without a reduction in benefits. If you make over that, then your benefit is reduced $1 for every $2 above that amount. Do you have any further questions? If you have no further question please rate my response as positive, as that's how I receive credit for assisting you today. Thanks again
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15205
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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