Deciding when to draw Social Security

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Q. I retired under FERS in 2008. I will be 62 next month, and supplemental benefit will stop. I’m working 1/2 time and earning approximately $17,000/year. I’ve heard that it would take till age 75 to recoup Social Security benefits lost by waiting until age 66 to start drawing Social Security. What is +/- of drawing Social Security at 62? My spouse will be 62 in March 2015. I would like to retire now!

A. Since I don’t do numbers, all I can offer is a few observations. If you begin drawing your Social Security benefit when you are first eligible, you’ll have money in your pocket every month, and it will be increased by annual cost-of-living adjustments. On the other hand, if you continue to work, that benefit will be subject to the Social Security earnings test. That test would reduce the amount of your benefit by $1 for every $2 you earn above the limit until you reach full Social Security retirement age. (In 2013 that limit is $15,480.) On the other hand, if you wait to age 66, the amount you receive monthly will be greater and it won’t be subject to the earnings test. However, you’ll also be closer to the day you die. So you might end up earning more for a shorter period of time.

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