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Stop, Look & Listen: Railroad Retirement Benefits Q&A

Answers are provided by Robert S. Kaufman

Reduced Monthly Benefit Starting at Age 62 vs. Full Monthly Benefit by Waiting to Start at Age 66

(Posted January 21, 2017)

Question 1255: Should I start my annuity at age 62, or wait until my full retirement age at 66?


At age 62 you can start your annuity, but of course the amount of each monthly payment will be less than the amount you'll get each month if you wait until age 66 to start your annuity.

By law, the amount of the monthly payment if you start at age 62 is 70% of the monthly payment you will receive if you wait to start at age 66.

Remember, the lower monthly payment that starts at age 62 is "set in stone" -- it will stay the same each month even after you attain age 66, for as long as you live.

But, by starting at age 62, you'll have 4 years of "money in your pocket" -- 48 monthly payments -- that you wouldn't have had, if you had waited to start at age 66.

Because none of us can predict how long our annuity will be paid (that is, how long we will live after annuity payments start), I always advise people to start taking their annuity payments at the earliest time -- that is, to start at age 62 despite the locked-in lower monthly payments.

The breakeven point -- that is, the point at which hindsight might start to nag at you -- does not happen until age 74 -- fourteen years after age 62. Starting at age 74, the total of your lower monthly payments received since age 62 would start to be exceeded by the total of the higher monthly payments you could have received since age 66. And every month after age 74, that gap grows larger.

But, frankly, none of us has a guarantee that we'll live until age 74, or a guarantee that we'll live a long time after age 74. And we don't even know for sure that we'll live until age 66. In my view, it's better to start at age 62 in order to lock in a guarantee of as many as 4 years of "extra" monthly payments.

Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.

Copyright 1997-2017 Robert S. Kaufman
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