Unlocking Financial Opportunities at 62: Beyond Social Security
For many Americans, reaching the age of 62 is a pivotal moment, representing both the earliest eligibility for Social Security retirement benefits and proximity to the average retirement age. However, age 62 also unlocks a range of financial opportunities beyond simply claiming a monthly check.
1. Reverse Mortgage Eligibility (HECM)
At 62, you become eligible for a Home Equity Conversion Mortgage (HECM), a reverse mortgage insured by the Federal Housing Administration (FHA). Available through FHA-approved lenders, a HECM allows you to convert a portion of your home equity into tax-free cash. This can provide supplemental income for expenses like daily living or home repairs.
While appealing for homeowners with significant equity, understanding the associated fees, interest, and long-term impact on your estate is crucial. A HECM isn’t suitable for everyone, but it's a financial option to consider at 62.
2. Private and Employer Pensions
Traditional pensions may be declining, but the Bureau of Labor Statistics reported that approximately 15% of U.S. workers still had access to them as of 2023. If you’re among them, age 62 is often considered a "normal retirement age" for pension benefits. The IRS also recognizes it as a "safe harbor" age for many private and employer-sponsored plans to begin payouts without penalties. Check with your plan administrator or HR department to confirm your eligibility.
3. Property Tax Breaks
Eligibility for property tax relief often depends on your state or county. In Georgia, for example, homeowners aged 62 and older may qualify for a floating inflation-adjusted homestead exemption. Similarly, in King County, Washington, residents may also be eligible for tax reductions at this age. While many states typically offer senior property tax exemptions starting at age 65, certain local programs begin at age 62. Contact your local tax assessor’s office for specific information.
4. Access to Retirement Communities
While housing discrimination based on age is generally prohibited, the 1995 Housing for Older Persons Act (HOPA) provides an exception for age-restricted communities. These communities typically fall into two categories:
- "55 or older": At least 80% of units must be occupied by someone aged 55 or older.
- "62 and over": All residents must be at least 62, with limited exceptions for caregivers.
Turning 62 grants access to stricter "62 and over" communities, potentially expanding your options for age-restricted housing.
5. Retirement Discounts
While there's no universal age for senior discounts, many retailers, restaurants, and travel companies offer them starting between ages 55 and 65. At 62, you are likely eligible for many of these programs. A 10% discount might seem small, but it can accumulate significantly over time, especially if you’re on a fixed income. Taking advantage of these discounts can help stretch your retirement dollars further.
