The age you begin claiming Social Security benefits can have a significant effect on your income throughout retirement, so it's a decision that shouldn't be taken lightly.
Age 62 is the earliest you can file for benefits. In some cases, claiming as early as possible is one of the smartest retirement moves you can make. Other times, though, you may be better off delaying benefits.
Everyone's situation is different, and what's right for one person may not be right for the next. There are a few scenarios where it may be best to claim Social Security at 62, and other situations where you might be better off waiting.
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Reasons to consider claiming at age 62
1. You can get a head-start on retirement
Perhaps the best reason to claim benefits early is that you can retire earlier. You don't necessarily have to retire and claim Social Security at the same time, but the two often go hand-in-hand. Social Security benefits can make it easier to afford retirement, so it generally makes sense to start collecting payments soon after you stop working.
Not everyone can afford to retire at 62, but if you can swing it, it could give you more time to enjoy your senior years. While many older adults remain active well into their 70s and beyond, not everyone has that luxury. If you're battling health issues or simply want as much time as possible to enjoy an active retirement, claiming benefits at age 62 may be the right move.
2. It could help your retirement strategy with your spouse
If you and your spouse are both entitled to benefits, it pays to come up with a strategy for when each of you will claim.
In some cases, you may both choose to claim early at 62 to start retirement as early as possible. In other scenarios, one person may file early while the other delays benefits -- a particularly smart strategy if one spouse is a few years older than the other, and you both want to retire at the same time.
3. It's possible to reverse your decision if you change your mind
When you claim benefits early, your decision may not be permanent if you change your mind. After you claim, you have one chance to reverse your decision. To do so, you'll need to withdraw your application within 12 months of filing, and you'll also need to repay all the benefits you've already received.
You can also suspend your benefits once you reach your full retirement age (FRA). With this strategy, you'll simply press pause on collecting Social Security, then you can begin claiming again later -- and earn larger checks each month.
Of course, it's best to consider your decision carefully so you won't need these strategies after you claim. But if you delay benefits and change your mind, you can't go back in time and claim earlier.
Why avoid claiming benefits early
1. You'll receive reduced monthly payments
One of the biggest downsides of claiming Social Security at 62 is that you'll receive less money each month. By claiming at 62, your benefits will be reduced by up to 30% compared to if you'd waited until your FRA to claim.
If money is going to be tight in retirement, this reduction in benefits could make it more challenging to enjoy your senior years comfortably. In that case, delaying benefits and earning larger checks may be a better option.
2. You may receive less money over a lifetime
In theory, you should receive the same amount over a lifetime regardless of what age you claim. Filing earlier will result in smaller checks but more of them over a lifetime, while delaying benefits will earn you larger payments but fewer checks.
However, the math doesn't always work out so neatly in real life. If you end up living a longer-than-average lifespan, you could receive more money over a lifetime if you delay benefits. Those larger checks will add up over time, and once you reach your late 70s or early 80s, you may receive more in total than if you'd claimed earlier.
While no one can predict exactly how long they'll live, it can help to examine your lifestyle and estimate your life expectancy to determine when is the right age to claim.
Choosing when to file for Social Security benefits is a big decision, and there's no one-size-fits-all answer. Consider your personal situation and expectations for retirement, and it will be easier to decide whether claiming at age 62 is right for you.
