Should you sign up early?
Now, what’s this about “retired workers”? Can you start receiving benefits before the age of 65? Well, actually you can. But you might not want to.
Legally, you can sign up and start drawing from the system once you hit 62. But there are incentives in place to try to dissuade people from signing up early, as the more people who start drawing the system, the more strained it becomes. The basic incentive system is such that if you wait longer to sign up — say, you wait until the age of 70 — you’ll receive more money.
Why, then, do people sign up early? Research suggests many people feel they’ll “miss out” if they don’t immediately start receiving checks. A study from the National Bureau of Economic Research Retirement Center said, “We consistently find that higher levels of loss aversion predict individuals’ preference for claiming Social Security benefits early.”
So, people sign up, leaving “future” money on the table, because they don’t want to miss out on the money they can receive immediately. But that’s not the only reason, and that’s important to keep in mind, too. And again, there are ways to increase that amount.
Next: Five simple steps to maximize your Social Security benefits.