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Social Security: 3 Reasons That 62 Is the "Most Prevalent Age" to Claim Benefits

The experts on Social Security are missing something.

While they continuously preach about the virtues of waiting to apply for benefits, the vast majority of Americans do just the opposite.

According to a recent study by the Government Accountability Office, 62 remains the "most prevalent age to claim Social Security benefits."

With this in mind, I wanted to offer current and prospective retirees a counterpoint to the conventional wisdom. What follows, in turn, are three good reasons to apply for benefits as soon as possible.

1. You want to
Let's get one thing straight from the get-go. Given that you're the one who put in the time and energy to qualify for Social Security in the first place, it almost necessarily follows that you're more than capable of determining the best time to claim them.

Keep in mind that most retirement experts have little on-the-ground experience. Many have white-collar jobs that consist of researching and writing in a calm and collected environment.

They're shielded, in other words, from the physical and psychological strains associated with more traditional blue-collar employment.

In the same study cited above, for instance, the authors found that 61% of respondents between ages 60 and 62 who held jobs in the farming, construction, and mechanical industries, among others, were in positions that demanded and/or involved "heavy lifting most or all of the time."

Suffice it to say, that type of employment isn't well suited for people in their 60s. Consequently, for those who find themselves in this position, there's little question that the scale tips heavily in favor of retirement as opposed to remaining in a physically demanding workplace.

2. You need the money
Of all the misconceptions among experts on the issue of Social Security, I believe the biggest is that everyone has the luxury of deciding whether to receive them early or late.

Ask most retired people, however, and they'd tell you just the opposite.

Consider this: According to the Social Security Administration, 51% of the workforce has no private pension coverage and 34% has no savings set aside specifically for retirement.

Or, how about this: "among elderly Social Security beneficiaries, 22% of married couples and about 47% of unmarried persons rely on Social Security for 90% or more of their income."

The point is that having the ability to defer benefits is a luxury that many people don't have. Consequently, if you're one of these, then you have absolutely no reason to lament the fact that you elected to claim early.

The inability of so-called experts to appreciate this is their shortcoming, not yours.

3. For the average retiree, it doesn't make any difference when you claim
Last but not least, the third reason to apply for Social Security benefits early is because, at the end of the day, it isn't likely to make a huge difference in your lifetime benefits anyhow.

"The Social Security benefit formula adjusts monthly payments so that someone living to average life expectancy should receive about the same amount of benefits over their lifetime regardless of which age they claim," notes the same study I cited earlier.

It accordingly follows that unless you're likely to far outlive the life expectancy of the average American (or you have a spouse or other dependents), then your cumulative lifetime benefits are likely to equal out at the end of the day regardless of when you take them.

With this in mind, in turn, why not get retirement started sooner rather than later? The worst thing that could happen is that by removing yourself from the stress and exertions of the workforce, you thereby extend your lifespan and thus your benefits.

I could be wrong on this count, but it seems to me that there are better things to worry about.

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Read/Post Comments (30) | Recommend This Article (142)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 14, 2014, at 9:43 AM, Cardzz wrote:

    Those who wait to age 66 are forgoing 4 years of benefits that would have accrued. If you saved the 4 years of earnings and got a 5% return you would be even with those who waited, But.........You would have $50,000 in your investment account from the 4 years of benefits!!!! Those who waited would have NOTHING!

  • Report this Comment On June 14, 2014, at 10:21 AM, BFH wrote:

    I absolutely agree with Cardzz I've been saying this all along. I am 62 on the verge of retiring I work in the aerospace industry and I'm luckier than most I have a very good pension and a VIP(401K). The downside is I have a mortgage and I'm single which means it's all up to me. We don't know how long we will live why leave your hard earned money on the table? Finally, finally an article that brings out the positive side of drawing early.

  • Report this Comment On June 14, 2014, at 10:28 AM, Buckcreekacres wrote:

    Finally an article that represents the real world. I retired at 62 A person should retire when they can still enjoy life. thanks for a great perspective on retirement.

  • Report this Comment On June 14, 2014, at 10:39 AM, VegasSmitty wrote:

    The one thing you can always count on is these self-proclaimed experts are always wrong!

  • Report this Comment On June 14, 2014, at 10:46 AM, basha0810 wrote:

    I agree with Cardzz as well. If you wait for a few years so that you can get more in benefits, you truly are foregoing the years that you could have received those benefits. In essence, all the government is doing is paying you a bit more for the 5 years you waited but in reality, they aren't giving you as much in order to make up for what you prolonged that they didn't have to pay you! I know that's a brain full, but think about it.

  • Report this Comment On June 14, 2014, at 10:47 AM, TimtheB wrote:

    Yes!Thank you! First, because I want to. Been at my job 31 years and it's changed a lot. My job is not physically demanding, but because of computerization and downsizing, it's stultifying. And now there's almost no social interaction. Try going to a stultifying, isolating job five days a week. Isn't that a recipe for mental decline in my retirement?

    Also, I didn't know that for the average retiree, the age of retirement doesn't make a difference. I'm thinking I'll just get out this fall when I turn 62. (I will have a pension, too, which makes it easier, though the fund is shaky.)

  • Report this Comment On June 14, 2014, at 11:10 AM, jbtfsplk wrote:

    "The worst thing that could happen is that by removing yourself from the stress and exertions of the workforce, you thereby extend your lifespan and thus your benefits" nails it right on the head. I cannot think of a single job in America that does not have excessive levels of stress. During the first decade of my 30 year professional career, I loved to go to work every day. Midway through, the level of meddling by governmental and quasi-governmental agencies became annoying. In the last decade have to respond to demands of a bunch of morons who never worked in the field and think they know more by citing a few poorly designed studies reduced my job satisfaction and increased my stress to the point it was affecting my health. Retiring three years early was the best decision of my life. I'll most likely now live long enough to collect more benefits than I would have had I waited to 65.

  • Report this Comment On June 14, 2014, at 11:17 AM, loistodd27 wrote:

    If I wait until I'm 70, I'll lose $82,368. I think I'll start drawing it at age 66, my full retirement age.

  • Report this Comment On June 14, 2014, at 11:18 AM, davidv935 wrote:

    I agree with most of what is written in the article because it's really saying if you need the money at 62 regardless of reason, then that's what it's there for. However, the difference in SS income between 62 and 66 is that at 66 that income is 33% higher per month than at 62. The question for each individual is whether that matters to the quality of their retirement lifestyle. Cardzz's comment assumes you have other retirement income streams and can invest the total SS income and achieve a higher ROI than the 7+% annual increase in SS over those 4 years.

  • Report this Comment On June 14, 2014, at 11:20 AM, ffbj wrote:

    I took it at 62 also counter to every expert on the subject, here was my thinking, similar to what others have posted. Mainly can I make 8% on the money yearly? Well last year the market was up 30%, quite unusual. But if not for my monthly SS check, which covers my expenses, I would have had to pull money out of my accounts. This way taking SS early I don't have too, I can let it ride so to speak.

  • Report this Comment On June 14, 2014, at 11:29 AM, Philly3373 wrote:

    Funny, I been telling folks all along to think about this in this way. I noticed that there are many articals being pushed to go late. I think the government is behind that to slow down the baby boomers from collecting and cashing in on what hard working employees and employers have been putting into the system their whole working lives.

  • Report this Comment On June 14, 2014, at 12:16 PM, grandmary wrote:

    I took my SS at 62 because I figured I would get it while I was alive and when I die my husband won't get it! His SS is more than mine, so if he dies first I will get his and not mine. He gets his, not mine if I go first. So why would I not take it while I can. And I can not take my IRS and other savings since I am taking SS!

  • Report this Comment On June 14, 2014, at 12:23 PM, francophile wrote:

    I needed to leave my job at age 61.3 due to health reasons. The job was so stressful because of management always threatening to put one on a performance improvement plan. The company ruled through fear and intimidation. When I began to have panic attacks I knew it was time to get out. I always thought it was best to wait until full retirement age to claim my widow's benefit so I have been living off my IRA and a small pension. Because of this article I am reconsidering my strategy and will consult with a financial planner about applying for my benefit asap!

  • Report this Comment On June 14, 2014, at 12:26 PM, mcbrayerja wrote:

    If what you receive at 62 is enough to live on going forward, then great, take it! If it is not, and you are still able to earn a living at your job, then wait until the SS IS enough to live on. You will still receive the $ from your job and the yearly income from SS goes up each year you wait by a LOT. Both because of the increase for waiting and also because you have more credits.

    If taking SS at 62 means you live in poverty and taking at 67 means you live reasonably well, there is something to think about.

    Also, Medicare doesn't start for you until 65. If you have your medical through work, what are you going to do for those 3 years of no coverage because you quit work? That ain't cheap!

  • Report this Comment On June 14, 2014, at 1:04 PM, Paycheck wrote:

    It depends on your finances. If you are married and wait until your 66, like people of my age. You will get about $650.00 more a month. If you bank the benifits from 62, it takes about eight years to make that up, if you spent, you needed it and this does not apply to you. Don't know anywhere you can get 5 % interest today, nothing even close to that, unless it's risky. At 66 your spouse can claim half of yours, and wait until 70 to collect theirs and get a extra $600.00 a month , so do the math on that, if you both live into your eighty's you'd be much better off waiting.

  • Report this Comment On June 14, 2014, at 1:13 PM, ralphrides wrote:

    finally an article that makes sense. unless the matching sex elders in you blood line have an unusual longevity, a bird in the hand is worth 2 or more in the bush. If you don't need the income, take it and invest it dollar cost average into SVXY or SPY or IWM. If you do need it waiting makes no sense as the total lifetime benefit calculation turns out to be the same. you can still do volunteer work and part time paid work and still get most or all of your social security payments if you need to keep busy doing something other than relaxing. don't forget the age 55 rule on IRAs on retirement, you don't have to roll it all over from a 401k to IRA you can move some to your bank accounts if you need to pay off something without any penalties like a mortgage or car loan. never ever use you retirement savings to pay off a child's school loan.

  • Report this Comment On June 14, 2014, at 1:23 PM, ralphrides wrote:

    contact metlife for an IRA annuity with automatic annual step up that has a guaranteed 5% return with annual principle lock. these can make more than 5% but never less and each year the principal is locked and can never decrease. So live off your SS early and move your 401Ks to this plan, and when you need to you start drawing off the annuity.

    The GMIB Plus/Predictor Plus rider, originally launched in 2005, is designed to offer guaranteed income for life, while prior to electing the guaranteed income for life option, allows dollar-for-dollar withdrawals of the 5% compounding income base up to 5% annually.

  • Report this Comment On June 14, 2014, at 2:24 PM, jennmac wrote:

    This article doesn't address medical insurance, a HUGE cost for retirees under 65. When my husband went from a large company with benefits to being a sole proprietor, our expense for two people went from $150 a month to $1,660. Yes, $1,660. The large company he worked for paid the majority of his premium and they had the bargaining power and large pool of workers to keep costs down. We had to buy an individual policy and had no bargaining power. And this policy is with high deductibles. I know things are changing with Obamacare and it might be more reasonable now, but if you have great medical benefits, research what your out of pocket costs will be when you retire.

    Otherwise, it's a good article based in reality for most people.

  • Report this Comment On June 14, 2014, at 4:05 PM, Arill wrote:

    Another reason to take it early:

    Taking it early likely reduces taxable Social Security, especially the part where they tax 85% of it.

    Example (for Single payer):

    If you make 15000 outside SS + 10000 from SS, = 25000 total, then no SS is taxed.

    If you make 15000 outside SS and 20000 from SS = 35000 total, then a % of that extra 10000 is taxed, some at 85% of tax rate.

  • Report this Comment On June 14, 2014, at 5:19 PM, iu77iu wrote:

    If you can answer two questions, I can tell you with 100% accuracy of when to begin taking Social Security. What is your date-of-birth? What is the exact date when you will die?

  • Report this Comment On June 14, 2014, at 5:49 PM, jearnhart wrote:

    Each person's situation is different and they should do a study to determine what is best for them.

    typically if you continue working past 62 then you may

    be better off til you quit working to start SS.

    If you are retired and not working then I believe typically you should start SS at 62 as it is a fixed annuity which will be worth zero the day you die.

    Last of all, I hope they are not paying these people to write these articles as they are mostly wrong and are generally just copies of an article written by someone else. (dozens of times)

  • Report this Comment On June 14, 2014, at 6:50 PM, JEEPESQ wrote:

    Your 'FOOL" ain't so smart for he missed the two main reason one should take the SS at 62. Here I go and this no charge for this.

    First of all, what most people don't realize, if you die before you take your SS , your estate gets NOTHING! That's like zero. No money collected and no reimbursement for all you paid in.

    #2. If you wait for full age , as the 'geniuses' the Fool referred to are now advancing, it will take you well over 11 years to get even than if you had started at 62.

    Some 'downside." You pay income tax on your SS benefits. But most people will only pay on 50% of the amount received. At worse you pay tax on 85% of the funds. But you still can't get a better deal anywhere else as far as tax goes.

  • Report this Comment On June 14, 2014, at 8:40 PM, jimmyjsum wrote:

    What about the "penalty" you receive if you start taking benefits at 62 and continue working and making well over the limit they set as to what you can make. Anything over that amount is deducted from your benefits. So, what is the point of drawing at 62 if you are healthy and working??

  • Report this Comment On June 14, 2014, at 9:36 PM, DickD wrote:

    Great article. I thought John did a great job writing this from the "real world" perspective. He is right on about the shielded, white collar researchers. Many people, including myself, started SS at 62 because we HAD to! Not even thinking twice about it.

  • Report this Comment On June 15, 2014, at 12:02 AM, KC532 wrote:

    Great comments by all! As many have stated, it really depends on your circumstances, including your family. No one answer works for all but, taken together, your comments cover most scenarios.

    Peace of mind is paramount so, once you make a decision, don't spend years second-guessing yourself.

  • Report this Comment On June 15, 2014, at 12:16 AM, slanciano wrote:

    Obozocare is the wildcard here. It will accelerate SS going broke. And that my friends will be all she wrote.

  • Report this Comment On June 15, 2014, at 12:29 PM, RalphinFL wrote:

    My father retired at 62 for health reasons, and lived almost another 10 years. If he had tried for 65, he would not have made it.

  • Report this Comment On July 03, 2014, at 12:24 AM, Energo wrote:

    In my situation, assuming a 4% return on my investments, if I take Social Security at age 63, therefore, I'll take less from my investments, giving me a break even point at age 97+.

  • Report this Comment On November 05, 2014, at 10:04 PM, garyd11 wrote:

    To answer jimmyjsum, about the penalty:

    The SSA.gov publication "How Work AFftects Your Benefits: states right on the first page:

    "if you are younger than full retirement age and earn more than certain amounts, your benefits will be reduced. It is import to note, though, that these benefits ARE NOT TRULY LOST." Your benefit will be increased at your full retirement age to account for benefits withheld due to earlier earnings."

    So it's only a temporary penalty if I am interpreting it correctly.

  • Report this Comment On November 10, 2014, at 9:05 PM, pcbigjim wrote:

    I just really enjoy how every financial advisor or SSA has the right to tell you when its OK to retire,too them if you don't have a bank roll or 401k to leave the workforce you need to stay working till 70.

    We have people in the USA that are still happy without all the stuff all Americans just have too have,which is NOTHING just enjoying LIFE,LOVE,and LAUGHTER what a way to go.

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John Maxfield
JohnMaxfield37

John has written for The Motley Fool since 2011. He has a bachelor's degree in economics from Lewis and Clark College and a juris doctorate from Southern Methodist University. View John Maxfield's profile on LinkedIn

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