The earliest age you can claim Social Security is 62, and it's one of the more popular options, with many retirees starting their benefits as soon as they're able. While many experts recommend claiming at 70, there are plenty of good reasons to begin getting checks ASAP -- although there are also some downsides as well.
To help decide what's right for you, consider three big reasons to claim Social Security at 62, as well as two reasons not to.
3 Reasons to claim benefits at 62
Here are some of the biggest reasons to claim Social Security at 62.
- You don't have to worry about outliving your projected life span: Under the Social Security system, you'll get the same lifetime benefits whether you claim them early or late as long as you live to your projected life span. If you outlive what is actuarially predicted, you'll get more by delaying your claim for benefits. But if you pass away early, you'll do better by claiming Social Security as young as possible. If you claim Social Security at 62, you won't have to worry about trying to beat the average.
- The buying power of benefits is eroding: Although cost of living adjustments (COLAs) are built into the Social Security system to ensure benefits don't erode in value, they are determined by a formula that's not a very accurate measure of senior spending. Because they measure changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, COLAs haven't been high enough to keep pace with inflation in some key areas where seniors do the bulk of their spending. The result is that benefits have lost about 30% of buying power since 2000, and there's no sign this will change. If you want to start your benefits before inflation eats away at them further, it makes sense to claim them as soon as possible.
- You can get the money while you're young and can enjoy it: For many people, health issues begin sooner than expected in retirement and inhibit the ability to enjoy their money. If you'd rather claim Social Security while you're still young enough to use your checks to travel or do other fun things, starting at 62 makes sense. This may be especially true if claiming your benefits enables you to retire early when it otherwise might not be possible.
2 Reasons not to claim at 62
Here are two of the biggest reasons claiming at the youngest age allowable may not be the best approach for most seniors.
- Benefit checks will be smaller: Claiming at 62 means accepting smaller checks for life, compared with what you could've received if you'd waited. Sixty-two is before your full retirement age (which is between 66 and 67 depending on your birth year). That means you'll get hit with early filing penalties if you start your benefits so soon. You'll also miss out on the chance to earn delayed retirement credits. Early filing penalties can cause a substantial reduction in your checks, reducing them by as much as 30% if your FRA is 67 and you claim at 62.
- Most retirees do better by waiting: While claiming early means you don't need to worry you'll miss out on benefits if you don't outlive your projected life span, the flip side is that you do need to worry about missing out on benefits if you live longer than actuaries predict. This is actually the more likely outcome, as around six in 10 retirees would get more lifetime benefits by waiting until 70 to claim them. Since Americans are living longer than ever, there's a very good chance you'll shortchange yourself by starting your benefits early.
Ultimately, there's no one right answer about whether to claim at 62 or wait. If you'd rather get checks sooner or think you'll pass away younger, starting your benefits at 62 is probably the best move. But you could regret it if you live well into your 80s and are stuck with smaller checks for life.