Social Security benefits for my brother retiring early at 62 after layoff at 59

She definitely needs to create a my Social Security account at ssa.gov to get an accurate estimate. The formula for calculating benefits is quite complex and depends on her 35 highest earning years adjusted for inflation (called AIME - Average Indexed Monthly Earnings). The SSA uses a progressive formula on that AIME amount to calculate her Primary Insurance Amount (PIA). Then, since she'll be claiming at 62 instead of her Full Retirement Age (which is 67 for someone born in 1965), she'll receive a permanently reduced amount - approximately 30% less than her full benefit. Those 3 years without earnings will have some impact because SSA uses the highest 35 years, and if she doesn't have 35 years of earnings, they'll use zeros for the missing years. But if she's worked consistently otherwise, the impact might be relatively small.

I went through almost the exact same situation. Here's what your sister should do: 1) Create a my Social Security account immediately (ssa.gov) 2) Look at her estimated benefit at age 62 - it will show right on her account 3) Consider if she can actually afford to live on that amount I got laid off at 58 and planned to take SS at 62, but when I saw the actual number, I realized it would be REALLY tight financially. The reduction for taking it at 62 vs. 67 is significant - about 30% less for the rest of her life! Since she's 59, she might want to look into withdrawing from 401k/IRA (if she has them) using Rule 72t to bridge the gap until 67. That way she can get her full SS benefit. Each year she waits past 62 increases her benefit by about 8%.

my brother did something like this last yr. he got like 1700 a month at 62 after working construction for like 30 something years. but it really depends on how much she made over the years!! everybody gets different amounts

@wondering72 - Rule 72t (also called SEPP - Substantially Equal Periodic Payments) lets you withdraw from IRAs or 401ks before 59½ without paying the normal 10% early withdrawal penalty. You have to take a specific calculated amount for at least 5 years or until you reach 59½, whichever is longer. There are 3 different calculation methods. It's complicated but can be really helpful if you need income between 59½ and 62 (or later). Definitely talk to a financial advisor who understands this rule before trying it.

I tried for WEEKS to create a my Social Security account and kept getting locked out!!! The website is HORRIBLE. Then I tried calling and spent 3 HOURS on hold only to get disconnected. The system is BROKEN. Your sister should try to figure out another way to estimate because dealing with SSA is gonna give her a heart attack!!!!

To give you a very rough estimate, Social Security benefits generally replace about 40% of pre-retirement income for average earners. So if your sister was making $60,000 per year, she might expect around $24,000 per year in benefits at her Full Retirement Age (67). At age 62, she'd get about 30% less, so roughly $16,800 per year or $1,400 per month. This is VERY approximate though - her actual benefit could be significantly different based on her lifetime earnings pattern. That's why checking her actual record is so important. Also, remember that if she decides to work part-time between now and 62, she could potentially increase her benefit amount, especially if she had any lower-earning years in her work history that would be replaced by these new earnings.

tell your sister dont do it!!!! my husband took ss at 62 and we regret it SO MUCH. were stuck with a tiny check forever and now that hes 70 we are really struggling. the extra money now isn;t worth the smaller checks for 20+ years!!!!!

One more thing your sister should consider: Medicare doesn't start until 65. If she retires at 62, she'll need to figure out health insurance for those 3 years. That can be VERY expensive and might eat up a big chunk of her Social Security check. Has she looked into health insurance options yet?

does she own her house?? that makes a HUGE difference if she has a mortgage or not. my SIL retired at 63 with just ss and she does ok because her house is paid off.

Here's another option for your sister to consider: If she really doesn't want to work full-time anymore, she could look for a part-time job just to cover her expenses until reaching an age where her SS benefit would be higher. Each year she delays claiming between 62 and 70 increases her benefit by approximately 8% FOR LIFE. Working part-time would also help address the health insurance gap before Medicare at 65, as some part-time positions offer health benefits. Plus, if she finds something less stressful than her previous job, it might be a good transition to full retirement. Just food for thought as she weighs her options.