00:00 Josh
Is 62 the new 70 when it comes to tapping into social security retirement benefits? That seems to be the latest buzz from online influencers. Yahoo Finance’s Kerry Hannon joins now from Boston. Look, Kerry, great to see you. So, let’s dig into this, Kerry. So taking your social security at 62
00:19 Josh
and invest it. This is apparently a buzzy topic, gaining some traction on social media. What what do you think, Kerry? Smart strategy?
00:29 Kerry Hannon
I personally, uh Josh, am not so fond of it. I think the uh long-standing advice has been to hold on if you can until age 70 to get your social security check, um because if you you can. Yeah, you can start at 62. Um but if you can wait to 67, which is usually the retirement age it is now for anyone born in 1960 or later. Um, you get about, it’s a third less if you start at 62.
00:54 Kerry Hannon
And then if you can hold on from your full retirement age to 70, it bumps up 8% each year. Lots of reasons why a lot of people aren’t able to do that. But by taking it at 62 and putting it and the the talk now is take it and put it in the in the market and invest it, which, you know, that could be fantastic. But um, yeah, that’s not always necessarily going to be the be the case and
01:13 Kerry Hannon
if you need that money and the market has taken a dive and hasn’t bounced back yet, you might regret not having that guaranteed income that social security provides as well as inflation uh protection.
01:21 Josh
Is there a group of people though, Kerry, who could think about claiming at 62, who it could make sense for?
01:27 Kerry Hannon
Yeah, Josh, here’s the thing. For most people, uh it’s not as much about having the bigger check is they actually need the money, right? They need it because they have health issues, they need it because they actually need that money to live on, uh to make ends meet, uh with rising costs. This is a big deal. If you’ve lost a job at 60, it’s not so easy to get back into the job market again. Ageism is alive and well in the market.
01:50 Kerry Hannon
And so in these situations, uh it makes sense to just go ahead. It’s about, you know, being able to to uh survive and make ends meet. Now, and also, the other thing you might like toss around is is there a lot of longevity in your family? You know, that’s something to think about because the later, if you wait till 70, you’re making a bit of a crystal ball look that you’re going to live a long life.
02:09 Josh
Switching gears, Carrie, you also write about how for a lot of small business owners now, they see their businesses as their as their retirement plans. Unpack that trend for us Carrie, and what are some of the the risks there you need to think about?
02:24 Kerry Hannon
Yeah, you know, I recently wrote about that in in a book I have out called retirement bites, uh that Yahoo finance actually co-branded with me. But the thing about this is yes, in fact, um, uh you know, for many people who are small business owners, their business is their retirement plan. and whenever the the company does well, they they put the money back into their business to help it grow, to juice it up, to keep things rolling.
02:49 Kerry Hannon
And and they don’t even have time to think about setting aside for retirement is in a sense taking money outside of their business and they just that’s not where their focus is. So, so as you get down towards that age where you think, hey, you know, I might be ready to to retire, this is a time to have an exit strategy. If that’s been the way you’ve you’ve been working it to think that this is your retirement plan, then okay, what are you thinking of?
03:10 Kerry Hannon
Are you going to be able to say sell your business and what’s it worth? Because most of us think our businesses are worth a whole lot more than they might actually be out in the open market and there’s lots if you talk to your financial advisor, uh they can help set you up with experts at this is their thing that they help you uh find the proper valuation for your company so you know what you might expect to have as um an asset in retirement that you can
03:36 Kerry Hannon
use to continue funding your living uh in your retirement years in your golden years. Also, if you think you’re going to pass it down to a family member and and talk to them about how that might work in terms of they would buy it from you gradually over time or you take a piece of the profits over time. Do they really want your business? Um that’s a family discussion that must be had. So those are just a couple of things, but it’s never too late really to get started saving for retirement if if that’s what you’re worried about.
04:02 Josh
All right, Carrie, as always, great to see you. Thank you.
