Claiming Social Security at 62 is a common choice for many people, as it allows you to start receiving checks earlier. However, there’s a trade-off: your checks will be smaller by up to 30%. This is because the government reduces your monthly payments if you claim Social Security before your full retirement age (FRA), which is between 66 and 67 for most workers today.
Despite this, claiming early can still be the right choice in certain situations. Here are three main reasons why claiming at 62 might be the best option for you.
1. You Can’t Afford to Wait
Social Security benefits increase for each month you delay claiming them. For example, your benefits grow every month until you reach the age of 70, giving you up to 32% more than what you’d receive at your full retirement age. However, to achieve this, you would need to delay claiming until you’re 70, which could mean waiting up to eight more years.
While this might work if you have enough personal savings or a steady job to rely on, it’s not an option for everyone. If you don’t have other sources of income, you may have no choice but to claim Social Security at 62.
Though claiming early could result in smaller lifetime benefits, it might be a better option than falling into debt or struggling financially. It’s important to focus on your current financial security first, even if it means smaller checks later.
2. You Have a Shorter Life Expectancy
While waiting to claim Social Security can lead to a larger lifetime benefit, it’s also important to think about how long you’ll be able to collect benefits. If you expect to live into your mid-80s or longer, delaying your claim is typically a good choice. However, if you have a shorter life expectancy, it might make more sense to claim early.
This could apply to those with terminal illnesses or a family history of health issues. In these cases, applying for Social Security before your FRA or at 62 allows you to collect as many checks as possible while you’re still alive.
But keep in mind, if you have dependents relying on your income, claiming early could reduce the survivor benefits they will receive after your passing. If this is a concern, you may want to consider waiting to claim until a later age.
3. You’re the Lower-Earning Spouse
In couples where there is a significant income gap, one strategy is for the lower-earning spouse to claim Social Security at 62. This provides the couple with some income, while the higher-earning spouse waits to claim Social Security later for larger checks.
Once the higher-earning spouse reaches their full retirement age, the lower-earning spouse can switch to a spousal benefit if it offers a higher amount than what they’ve been receiving as a retired worker. The spousal benefit can equal half of what the higher-earning spouse qualifies for at full retirement age.
This strategy is most effective for couples with a big difference in their lifetime earnings. If both partners earned similar amounts throughout their careers, it’s typically better to choose a claiming age based on the overall financial situation and life expectancy of each person.
What You Should Do Now
Even if you’re many years away from claiming Social Security, it’s helpful to start thinking about when you might apply. By having a general idea of when you want to claim, you can plan ahead and adjust your strategy as you approach retirement.
Remember, the decision to claim Social Security early or later is a personal one that depends on your unique financial situation, health, and family circumstances.
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