Nancy Weingard, CLTC,CFP®Vice President, Financial PlanningRobert Weingard, CLTC2255 Glades Road, Suite 120-ABoca Raton, FL 33431561-997-9100866-206-2609nancy.weingard@raymondjames.comWeingardwealthmanagement.com

Social Security: What ShouldYou Do at Age 62?

August 07, 2013

Is 62 your lucky number? If you're eligible, that's theearliest age you can start receiving Social Securityretirement benefits. If you decide to start collectingbenefits before your full retirement age, you'll havecompany. According to the Social SecurityAdministration (SSA), approximately 74% ofAmericans elect to receive their Social Securitybenefits early. (Source: SSA Annual StatisticalSupplement, 2012)

Although collecting early retirement benefits makessense for some people, there's a major drawback toconsider: if you start collecting benefits early, yourmonthly retirement benefit will be permanentlyreduced. So before you put down the tools of yourtrade and pick up your first Social Security check,there are some factors you'll need to weigh beforedeciding whether to start collecting benefits early.

What will your retirement benefit be?Your Social Security retirement benefit is based onthe number of years you've been working and theamount you've earned. Your benefit is calculatedusing a formula that takes into account your 35highest earnings years. If you earned little or nothingin several of those years (if you left the workforce toraise a family, for instance), it may be to youradvantage to work as long as possible, because you'llhave the opportunity to replace a year of lowerearnings with a higher one, potentially resulting in ahigher retirement benefit.

If you begin collecting retirement benefits at age 62,each monthly benefit check will be 25% to 30% lessthan it would be at full retirement age. The exactamount of the reduction will depend on the year youwere born. (Conversely, you can get a higher payoutby delaying retirement past your full retirementage--the government increases your payout everymonth that you delay retirement, up to age 70.)

However, even though your monthly benefit will be25% to 30% less if you begin collecting retirementbenefits at age 62, you might receive the same ormore total lifetime Social Security benefits as you

would have had you waited until full retirement age tostart collecting benefits. That's because even thoughyou'll receive less money per month, you mightreceive more benefit checks.

The following chart shows how much an estimated$1,000 monthly benefit at full retirement age would beworth if you started taking a reduced benefit at age62.

Birth Year Full RetirementAge

Benefit

1943-1954 66 years $750

1955 66 years, 2months

$741

1956 66 years, 4months

$733

1957 66 years, 6months

$725

1958 66 years, 8months

$716

1959 66 years, 10months

$708

1960 or later 67 years $700

Source: Social Security Administration

If you want to estimate the amount of Social Securitybenefits you will be eligible to receive in the futureunder current law (based on your earnings record)you can use the SSA's Retirement Estimator. It'savailable at the SSA website atwww.socialsecurity.gov. You can also sign up to viewyour online Social Security Statement at the SSAwebsite. Your statement contains a detailed record ofyour earnings, as well as estimates of retirement,survivor's, and disability benefits, and otherinformation about Social Security.

Even if you startcollecting Social Securitybenefits at age 62, keepin mind that you stillwon't be eligible forMedicare until you reachage 65. So unless you'reeligible for retiree healthbenefits through yourformer employer or yourspouse's health plan atwork, you may need topay for a private healthpolicy until Medicarekicks in.

Page 1 of 2, see disclaimer on final page

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013

This information was developed by Forefield, Inc. an independent third party. It is general in nature, is not a complete statement of all informationnecessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security. Investments andstrategies mentioned may not be suitable for all investors. Past performance may not be indicative of future results. Raymond James &Associates, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with an appropriate professional.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federallyregistered CFP (with flame logo), which it awards to individuals who successfully complete initial and ongoing certification requirements.

Have you thought about yourlongevity?Is it better to take reduced benefits at age 62 or fullbenefits later? The answer depends, in part, on howlong you live. If you live longer than your "break-evenage," the overall value of your retirement benefitstaken at full retirement age will begin to outweigh thevalue of reduced benefits taken at age 62.

You'll generally reach your break-even age about 12years from your full retirement age. For example, ifyour full retirement age is 66, you should reach yourbreak-even age at 78. If you live past this age, you'llend up with higher total lifetime benefits by waitinguntil full retirement age to start collecting. However,unless you're able to invest your benefits rather thanuse them for living expenses, your break-even age isprobably not the most important part of the equation.For many people, what really counts is how muchthey'll receive each month, rather than how muchthey'll accumulate over many years.

Of course, no one can predict exactly how long they'lllive. But by taking into account your current health,diet, exercise level, access to quality medical care,and family health history, you might be able to make areasonable assumption.

How much income will you need?Another important piece of the puzzle is to look athow much retirement income you'll need, based partlyon an estimate of your retirement expenses. If there isa large gap between your projected expenses andyour anticipated income, waiting a few years to retireand start collecting Social Security benefits mayimprove your financial outlook.

If you continue to work and wait until your fullretirement age to start collecting benefits, your SocialSecurity monthly benefit will be larger. What's more,the longer you stay in the workforce, the greater theamount of money you will earn and have available toput into your overall retirement savings. Another plusis that Social Security's annual cost-of-livingincreases are calculated using your initial year'sbenefits as a base--the higher the base, the greateryour annual increase.

Will your spouse be affected?When to begin receiving Social Security is morecomplicated when you're married. The age at whichyou begin receiving benefits may significantly affect

the amount of lifetime income you and your spousereceive, as well as the benefit the surviving spousewill be entitled to, so you'll need to consider how yourdecision will affect your joint retirement plan.

Do you plan on working after age 62?Another key factor in your decision is whether or notyou plan to continue working after you start collectingSocial Security benefits at age 62. That's becauseincome you earn before full retirement age mayreduce your Social Security retirement benefit.Specifically, if you are under full retirement age for theentire year, $1 in benefits will be withheld for every $2you earn over the annual earnings limit ($15,120 in2013).

Example: You start collecting Social Security benefitsat age 62. You continue working, and your job pays$30,000 in 2013. Your annual benefit would bereduced by $7,440 ($30,000 minus $15,120, dividedby 2).

Note: If your monthly benefit is reduced in the shortterm due to your earnings, you'll receive a highermonthly benefit later. That's because the SSArecalculates your benefit when you reach fullretirement age, and omits the months in which yourbenefit was reduced.

Other considerationsIn addition to the factors discussed here, otherfinancial considerations may influence whether youstart collecting Social Security benefits at age 62.How do other sources of retirement income factor in?Have you considered how your income taxes will beaffected?

What about personal considerations? Do you plan ontraveling, volunteering, going back to school, startingyour own business, pursuing hobbies, or moving to anew location? Do you have grandchildren or elderlyparents whom you want to help take care of? Everyperson's situation is different.

For more informationSocial Security rules can be complex. For moreinformation about Social Security benefits, visit theSSA website at www.socialsecurity.gov, or call (800)772-1213 to speak with a representative. You mayalso call or visit your local Social Security office.

Page 2 of 2