As the U.S. entered this recession, the unemployment rate hit a record high. Workers have been laid off or furloughed as businesses closed due to the coronavirus. With payrolls down, the benefits that Social Security offers could be more important than ever to a growing number of people near retirement whose incomes are being impacted.How to Calculate the Break-Even Age for Taking Social Security
It’s impossible to know exactly how this recession will impact our economy long term, but we do know it might be impacting how retirees strategize their benefits. Depending on your unique situation, you might find yourself turning to one of these claiming strategies:Enrolling in Benefits Early
If you’re 62 or older and faced with an unexpected job loss, you need to figure out if you will retire early or look for another job. Will you start taking Social Security, or will you tap into your retirement savings for income?
If you do decide to start taking Social Security early, you need to understand that your benefit will be permanently reduced if you claim before your full retirement age, which is somewhere between 66 and 67. For those who turn 62 in 2020, full retirement age is 66 and 8 months.
Because of the permanent reduction in benefits, we usually recommend waiting to claim Social Security until full retirement age or later … but if you need the income, taking Social Security early might be a good option.Take Your Social Security Benefits, but Reserve the Right to Change Your Mind Within 1 Year
You are allowed to withdraw your Social Security benefits after enrolling. If you start taking Social Security before full retirement age and then find another job, you might decide to withdraw your benefits, or else you’ll face a reduced monthly check if you earn too much. You can withdraw your benefits within the first year of claiming Social Security, no matter what your age. You must pay back any money you received; the Social Security Administration then treats it like you never enrolled, and your monthly check can continue to grow until you start taking benefits again.14 Social Security Tasks You Can Do Online
Here’s an example of when this might make sense: Let’s say you're suddenly laid off at age 62 and decid