I’ll be 62 in November and times are tough right now. Is it possible to use social security temporarily and then end it when things start moving again?
I was thinking of maybe only taking it for a short time until early summer 2021. I’ve been in pet care for 15 years but COVID-19 and our government decisions have put it down. About 80% of my business are customers who travel.
When you start taking Social security benefitsYou have 12 months to withdraw your application, which will stop your payments. However, you will also have to repay all of the social security money you received. I would therefore urge you not to take that approach, if at all.
The problem is, we just don’t know when we’re going to get back to normal life. I would like to believe that it will happen by the summer of 2021, but I am not particularly confident. I wouldn’t expect mid-2021 to be so normal for you to keep an eye on your monthly bills and pay back six months worth of social security benefits.
Many people will still recover financially, so we may still be taking fewer vacations. With so many companies figuring out how remote operations work, the chances are that business travel will never return to pre-pandemic levels.
As I’m sure you know, using social security as a temporary solution to difficult times has permanent ramifications. For every year that you claim benefits before your full retirement age, reduce your lifelong monthly payments by 6.66%. If you can wait past full retirement age, increase these payments by 8% for each year you postpone until you are 70 years old.
Getting the maximum benefit upfront is your best defense against the rising cost of living. In 2021 the Social insurance COLA will only be 1.3%, an increase completely unaffected by actual cost increases for seniors.
But I also understand: It’s so easy to tell people to wait as long as possible to make social security claims.
Unfortunately, many workers find themselves in the same situation as you. Of course, you can plan to work on Social Security for as long as possible and take it off. But it just doesn’t work that way for many workers forced to retire early, often due to loss of income or health problems.
The average 2020 monthly social security retirement pension is just over $ 1,500. Yours would likely be lower as you would make claims once you are eligible. However, let’s use the average of $ 1,500. Is there any other way to make $ 1,500 a month?
Could you replace some of your pet sitting income with other gig chores like food delivery? Or you could get part time Bridge job Work in a store or complete a customer service assignment that you can work with To work from home? Could you use your animal handling skills by working in a veterinarian’s office?
Anything you can do to cobble together that extra income to survive now is worth considering.
I would also look at other non-insured benefits that you might be eligible for. You can use profit.gov To find out if you are entitled to other forms of assistance, fill out a short questionnaire. If you haven’t looked at unemployment benefits, it is at least worth a visit to check your government unemployment website to see if you qualify.
Neither of which is likely a silver bullet. However, if you can find other ways to get income temporarily, even if it comes a little from multiple sources, hopefully you can delay your benefits. If you have retirement savings, it can make sense to make a small dividend to buy yourself some time. Because of your age, you won’t be hit by one Early withdrawal penalty. Since you are close to your 62nd birthday, a reverse mortgage could also be an option if you own your home and have significant equity.
I would only receive benefits now if you are happy with the fact that you may not be able to suspend your benefits and repay your social security a few months later. This is only an option if you can accept the likelihood of reducing your benefits for life.
Robin Hartill is a certified financial planner and senior editor at The Penny Hoarder. Send your tricky money questions to [email protected].
This article originally appeared on www.thepennyhoarder.com