Social Security at 62 goes viral, and experts break down the risks

Social Security at 62: A Risky Investment Strategy?

Some social media influencers are urging people to take their Social Security benefits at 62 and invest the money in the stock market, but experts warn that this approach can put retirees at risk.

• Financial Experts Weigh In
• Boston University economist Laurence Kotlikoff told Yahoo Finance that delaying Social Security benefits almost always makes sense, as it results in a higher, safer monthly check.
• Kathleen Romig, director at the Center on Budget and Policy Priorities, emphasized the importance of Social Security's annual cost-of-living adjustments, which provide inflation-protected income for many retirees.

The Pitch for Claiming at 62

Some finfluencers are suggesting that people can invest their smaller Social Security checks at 62 and earn more than the Social Security increase, but experts say that this approach is not guaranteed and carries significant risks.

• The Risks of Investing in the Stock Market
• The stock market can be unpredictable and may suffer during inflation, making it a less reliable source of income for retirees.
• Lukas Brandl-Cheng, a Vanguard investment strategy analyst, warned that repeating the last decade's strong stock returns would require unrealistic earnings growth or very high valuations.

The Real Reasons People Take Benefits at 62

While delaying Social Security benefits may result in a higher monthly check, many people cannot afford to wait because they need the money right away when they retire.

• Financial Challenges
• Many Americans worry about the future of Social Security and may claim benefits at 62 due to fear or necessity.
• Financial advisers agree that life situations, such as health problems or short family longevity, can make claiming at 62 the only option.

Conclusion

While some people may be tempted to take their Social Security benefits at 62 and invest the money in the stock market, experts warn that this approach can put retirees at risk.

Delayed Social Security is not always the best move for everyone, but investing early benefits with the hope of huge stock market gains is not a smart or safe strategy.

FAQs

• Q1: Is it better to take Social Security at 62 or wait until 70?
• A: Most experts say waiting until 70 is better because you get a much bigger and guaranteed monthly check.
• Q2: Can investing Social Security money at 62 make me more money?
• A: It is risky because stock returns are not guaranteed, while Social Security increases are safe and inflation-protected.