Claiming your Social Security retirement benefits early will result in a monthly benefit that's permanently reduced by up to 30%, depending on your full Social Security retirement age and how early you decide to start receiving your benefit.
Despite this fact, more than half of Americans choose to start Social Security before attaining full retirement age, and the overall average claiming age is 64.5 years old. In many cases, it's not smart to wait to claim Social Security, even though doing so would result in bigger monthly checks. Here are three of the main reasons why you might want to consider early Social Security for yourself.
1. You need the money
This is the most obvious and the broadest reason that people claim Social Security early, but it's still important to mention.
Many people are forced to leave the workforce or cut their workload down to a part-time level before they had planned on. In fact, a recent Voya Financial study found that 60% of retired workers left their jobs before they expected to, with health concerns and layoffs the most likely reasons.
Other Americans are fortunate enough to retire early by choice. Maybe they've saved aggressively for retirement or simply plan to live an inexpensive lifestyle after retiring. Whatever the reason, not working anymore can be a good reason to claim Social Security early. Doing so is generally preferable to living solely off 401(k) or other retirement savings in order to delay Social Security.
2. Your spouse is entitled to a benefit based on your record
If you or your spouse didn't work much or one of you earned comparably little, it's a smart idea to familiarize yourself with Social Security spousal benefits. Essentially, spousal benefits guarantee a certain amount of retirement income to a lower-earning spouse, which can be as much as half of the primary earner's full retirement benefit.
The key point for the purposes of this discussion is that the age of eligibility for spousal benefits is the same as for standard retirement benefits -- it can be claimed as early as 62 -- but it cannot be claimed until the higher-earning spouse has claimed their own retirement benefit.
In other words, if you and your spouse are both 65 and your spouse was a full-time parent for most of his or her adult life, he or she could receive a retirement benefit that's based on your work record, but not until you claim your own benefit.
It's also worth noting that spousal benefits are capped at half of the higher-earner's full retirement benefit, and do not get increased for waiting beyond full retirement age. For this reason, if your spouse is entitled to a benefit on your work record, it rarely makes sense to delay retirement beyond their full retirement age.
3. You're in poor health
Here's one fact about Social Security that many people don't know: The program is designed so that the average retiree receives the exact same amount of benefits during their life, regardless of whether they claim Social Security early, late, or right on time.
So, if your full retirement age is 67 and you decide to claim Social Security at age 62, the additional five years of income you'll receive should offset the lower monthly checks in the long run.
However, remember that this is based on averages, not on your particular situation. As a result, if you're in relatively poor health when you first become eligible for Social Security, or if you have a family history of heart problems or premature death, it could be a smart idea to claim your benefits as soon as possible.