One of the biggest retirement decisions you’ll make is determining when to begin claiming Social Security benefits. This choice will affect your monthly income for the rest of your life, so it’s not a decision to take lightly.
Many experts recommend delaying benefits because it will result in larger payments each month. If you claim as early as possible at age 62, your benefit amount will be permanently reduced by up to 30%.
Despite this reduction in benefits, there are a few good reasons to consider filing for Social Security at 62.
1. It makes it easier to retire earlier
If you’re eager to retire as soon as possible, claiming benefits earlier can provide some extra monthly income. You don’t necessarily have to claim Social Security as soon as you retire, but if you retire at 62 and then wait a few years to take benefits, you could end up draining your personal savings too quickly. Although you’ll receive smaller checks by claiming at 62, it may help preserve your nest egg if you retire early.
Filing early can also help if you’re forced into an early retirement due to job loss or health issues. If you have a robust nest egg, you may be able to afford to retire early and delay benefits. Otherwise, claiming Social Security early could be a smart financial move.
2. You have a strategy with your spouse
If you and your spouse are both entitled to Social Security benefits, it’s wise to have a strategy for when each of you will begin claiming. In some cases, it could be smart for one spouse to delay benefits while the other begins claiming early. That way, you can still take advantage of the larger checks you’ll receive by waiting, but you’ll also have a little extra money early in retirement by filing at 62.
Or if you want to get a head start on retirement, you may both decide to file early. Again, this will result in smaller checks for both of you, but if your combined benefit amounts are enough to pay the bills, there’s no harm in filing early.
3. Your lifetime benefits should be roughly the same
In theory, the amount you receive from Social Security over a lifetime should be roughly the same no matter when you file. By claiming at 62, you’ll receive smaller payments but more of them in total. If you delay benefits, you’ll receive fewer checks overall, but each one will be larger.
These calculations assume you’ll have an average life span. For most Americans, then, it may not necessarily matter when you claim, because your lifetime benefits should even out, regardless.
If you have reason to believe you won’t live into your late 70s or early 80s, though, claiming early could be an even smarter move. If you end up having a shorter-than-average life span, you could actually collect more over a lifetime if you claim earlier.
Is claiming early right for you?
The best age for you to file for Social Security will depend on your unique situation, so there’s not necessarily a one-size-fits-all answer.
Claiming early won’t be the best fit for everyone. If your savings are falling short and you’re aiming to maximize your monthly income, for example, delaying Social Security could be a smart move. Similarly, if you have reason to believe you’ll have a much longer-than-average life span, you could collect more over a lifetime by delaying.
There are plenty of reasons to consider claiming early, too. While it’s not the right move for everyone, if you’ve done your research and understand how it will affect your monthly benefits, it could be a smart decision.
