If I retire at 59.5 and start drawing retirement from my 401k will affect my social security?

Question

I plan to sign up for social securit at the age of 62 full retirement is 65. Being that I don't pay social security for 2.5years does that affect what I should be recieving when I do sign up when I turn 62.

Answer 1

Your benefit is calculated based on your highest 35 years of earnings on which you paid SS. If you have not paid SS for 35 years, before you start getting receiving payments, you will have some zero years included in your average and that will reduce the benefit. If you have paid SS for 35 years, paying for an additional 2.5 years will increase your benefit only if your earnings are higher than some of your previous 35 years of earnings. Note that the benefit calculation is not based on your actual earnings, but by your earnings multiplied by an inflation adjustment factor. Money earned long ago counts more. If you earned $10,000 35 years ago you would need to earn more than $46,000 next year in order for next years earnings to make your benefit increase.

In order to for 65 to be your full retirement age, you need to have been born in 1937 or earlier. That would make you about 70 now. If you are not yet 59.5, your full retirement age must be 66 or older.

If you die at the average age estimated by SS, you will receive the same total benefit whether you start receiving it at 62 or 66. If you live longer than average, you will get more if you wait. If you die younger than average, you will get more if you start early.

Answer 2

No, only earned income would affect your social security. Withdrawing from a 401K won't hurt it.

But yes, taking social security early will lower your monthly benefit, and not paying in for that last 2.5 years could make some difference but probably not a lot.

Answer 3

sort of. the total benefit amount you receive over your lifetime should be the same whether you collect at 62 or 65. however youre annual alottment will be smaller if you start collecting at 62 that way the funds will be spread out longer to compensate for those three years.
for example lets say your total benefit entitlement is 100000 and you live to 100. if you start to collect at 65 then each year youd receive about $2857. if you start to collect at 62 then each year youd get about $2631 but over the lifetime of the benefit youd still get 100000.
so its not that youre not getting more because you stopped paying three years earlier, youre getting the same amount but just spread out a little longer.
to try and clarify a bit heres a quote from the social security page: "As a general rule, early retirement will give you about the same total Social Security benefits over your lifetime, but in smaller amounts to take into account the longer period you will receive them"

Answer 4

yup, you will get less. and not just less, less for the entirety of your benefit payments. if you wait till 65 you would get more, and if you could wait till 70 you would get more than double the 62 payment every month. I just looked into this for my folks because they are not too financially savvy, I can't remember where I saw the table, but the difference a couple years made was surprising. Also, I don't think it is when you start to draw benefits, but when you stop working that determines how much you get.

Answer 5

how much will i get if i retire at the age of 59

Answer 6

Nobody actually answered the question