Why I'm Taking Early Retirement
By Judy Kirkwood
For me, the sixties are more fabulous than the fifties. For one thing, beginning at age 59 1/2, as a sneak preview, you can access your IRA savings – if you have any -- with no penalty other than the regular tax (do it before and you’re hit with an additional 10 percent penalty). At age 62 you can apply to receive early Social Security benefits. At 65, we have Medicare and can perhaps drop our expensive healthcare insurance if we’ve been paying privately – depending on who is elected and what happens in Congress.
Born September 1, 1950, I’m going for the gold now. The penalty for taking Social Security early is a little over 7 percent a year. And – the really bad news – you can’t earn more than $14,640 from wages (you don’t have to count other money coming in from retirement sources). But that’s your adjusted income figure, after deductions; if you have a lot of business, education, or medical deductions, this is a deal worth considering.
If you wait until full retirement age at 66, you have a higher earning ceiling of $38,880 (according to 2012 rules). But since I have no idea how long I’ll live (the average lifespan for a woman at 60 is 85 years), or if our Social Security system will remain intact, I decided to at least apply to receive benefits early. I’ll get my first check in the middle of October.If I make too much money and go over the $14,640 AGI ceiling, Social Security will deduct $1 from my benefit payments for every $2 I earn above the annual limit. I’ll take that chance this year because I have a lot of deductions. If it looks like I’m going to make more next year, I’ll stop my benefits.